Should the U.S. legalize hard drugs?

http://www.washingtonpost.com/opinions/should-the-us-legalize-hard-drugs/2012/04/11/gIQAX95QBT_story.html?tid=pm_pop

This article is about the likely repercussions of the United States legalizing hard drugs like cocaine and heroin. It steps away from the traditional moral argument, taking the stance that regardless of the morality or immorality of using drugs people will do it. Instead it examines the economics of the situation. Individual drug dealers on the street, for instance, do not actually earn much. The bulk of profits from the sale of drugs goes to the cartels.

Cartels not only profit greatly from the sale of drugs, which are expensive when sold in the US, but are cheaply and easily produced, but they also oppose their legalization. With drugs like these being illegal, they can control the supply more easily, and that makes prices higher. Legalizing drugs like these would hurt the cartels enormously, but such arguments are almost always overshadowed by those about drugs being morally wrong.

The economist debate: The French Model

Here is another debate that is currently going on about whether the French political class who is running the so-called "French Model" that we learned in class has been failing its economy.

http://www.economist.com/debate/days/view/826




French election has been going on, and people notice that both prominent candidates, Nicolas Sarkozy and François Hollande, has not been spending any time about addressing potential problems of the "French model" to the economy, which seemed to be a problem recognized by many in this nation. Following the debate is really interesting as it relates directly to the materials we learned in class about French. This also help us to see other people's perspective about the question whether this French Model of Indicative Planning is sustainable. 

In Spain and Italy, Signs of a Lingering Crisis for Europe

This article is about the European Sovereign Debt Crisis. Although it has not been drawing as much attention since this fall and the economy seemed to be recovering, there are still major problems that need to be addressed. Spain’s unemployment rate is almost one fourth of the workforce and Spanish homeowners are struggling to repay their loans. Italy does not have the housing crisis but is faced with immense public debt. Last week’s increased borrowing prices of Spain and Italy reflects that. The upcoming EU economic health releases to be made over the next several weeks will demonstrate the extent of the problem as well. Southern countries have been using the European Central Bank loans in order to pay off their own national debt, which has not helped recovery since investors are cautious about entering the tumultuous market. The situation is influencing the political and economic climate of all of Europe. How do you think the EU should deal with the PIIGS countries?

http://www.nytimes.com/2012/04/16/business/global/for-europe-a-return-of-the-jitters.html?pagewanted=2&_r=1&hp

Mega Millionaires' Big Tax Bills

If you were lucky to win the mega million lottery and take the cash offering of $128 million, this article breaks down how much you would actually be able to keep after taxes.  All the different taxes and the amount that goes to the government is astonishing.  The amount of money millionaires give to the government is very eye opening and interesting to see.

http://www.smartmoney.com/taxes/income/mega-millionaires-big-tax-bills-1334090295769/?grcc=88888Z0ZhpgeZ0Z0Z0Z0Z0&mod=WSJ_hpp_sections_personalfinance

US and Latin American relations are changing

US and Latin America
This article from the Economist talks about the evolving relationships with the United States and the rest of the Americas.  The view of US power and ultimate authority is shifting in the eyes of 100 wise men and women, whom are presidents, eminences and ambassadors for the United States and Canada and Latin America.  A report by Washington-based Inter-American Dialogue reveals, that most countries in Latin America are seeing the US as "less and less relevant to their needs--and with declining capacity to propose and carry out strategies to deal with the issues that most concern them." One of the issues involves legalizing/decimalizing drugs in attempt to reduce violence cause by them.  Another is is immigration, Mexico feels the US had been unreasonably strict about protecting their borders.

New World Bank Pick expected Monday

For more than 60 years, the World Bank has been led by an American, as part of an agreement among Western European allies. However, new candidates from developing countries are threatening the U.S. reign. Dartmouth University president Jim Yong Kim is facing off against Nigerian Prime Minister Ngozi Okonjo-Iweala. There have been complaints that the bank's leadership needs to better reflect the world's evolving economic order.However, many analysts believe that Kim will still get the presidency because of the voting structure--the U.S. and Europe have 50% of the voting shares.

U.S.-Colombia Trade Pact Is Set

This story published in the Wall Street Journal points to the influence that the United States has on other countries economies. The United States enacted stronger regulations on developing economy of Colombia to be in stronger support of free trade and protect workers rights. The United States has this power to change how trading partners run there economies and over the next decade it will be a interesting to see how the EU and China will play into this power dynamic. Do you think the EU and China in the future have the same influence on a countries economic policy that the United States does?

After the sugar rush: Spanish bond yields have risen as the effect of cheap ECB cash wears off

http://www.economist.com/node/21552582

This article describes how the crisis in the Eurozone has not subsided, and why the crisis, especially in Spain and Italy, is likely only to get worse. The Spanish government has failed to address concerns, leading to bond prices to increase in the country as confidence falls. The Spanish budgeted was not cut by as much was hoped, and their economy is in deep recession, leading to significant fears that they won't be able to get themselves out of the crisis. While the world has largely turned to Greece as the failed economy and benchmark of recovery in Europe, Spain may soon send the Eurozone deeper into economic distress.

Competition Is Healthy For Governments, Too

This article discusses whether competition between governments is beneficial or not. It starts out by explaining how competition is essential for markets to function. It then turns to competition with respect to government. He argues that competition between governments allows people to choose to move based on the taxes and social services in the area. This is also the case for capital which has lead to a fall in corporate taxes over the last few decades. Conservatives are in favor of such competition between governments, due to their dislike of large governments. Liberals, on the other hand, are opposed to this competition between governments, because it can make it harder to redistribute income. The article also comments on the fact that it is easier to move to a different county or state than a different country. This is why tax systems are less progressive at state and local levels than at the national level.

Consumer bureau to crack down on mortgage servicers

 http://money.cnn.com/2012/04/10/news/economy/consumer_bureau_mortgages/index.htm

As stated in the news, announced on Tuesday, April 10^th,  the Consumer Financial Protection Bureau is considering new rules aimed at mortgage services to protect consumers against “costly surprises.”

According to this news, the bureau’s new rules will strengthen the requirements of services to issue mortgage statements. It will require the mortgage services to be more clear and transparent; for example, it requires the issuers to better disclosure about fees or changes in a loan’s interest rate. Put it differently, the bureau wants to ensure consumers, at any time, can know how much they owe, what they are paying, and how their payments are being applied. It is said that these new rules would be the federal government’s first major move to crack down on the entire mortgage serving industry crisis. 

Moreover, the new rules coincide with new standards set forth by a large settlement deal between states attorneys general and the five largest banks. The Consumer Financial Protection Bureau’s rules would ask all services to ensure better transparency for all borrowers.  According to the bureau, the new rules would start to take effect next January.  

Additionally, the rules would also tackle so called “force-placed” insurance. Force-placed insurance is property insurance that banks take out for homeowners who either miss an insurance payment or just do not have as much insurance as banks would like. The new rules would require the mortgage services to ask homeowners for proof of insurance before charging for force-placed insurance. 

In terms of my view, I support the new rules which will strengthen the regulations of the entire mortgage industry. Although the rules are seemed as clichés, they are actually fundamentals for the development of an industry.

To Seriously Improve Global Health, Reinvent the Toilet

This article talks about how better sanitation system could help two-thirds of the world's 7 billion peoples health.  According to the World Health Organization, an estimated 2.6 billion people don't even have an access to a minimally sanitary facility.  This causes illness and early death.  To prevent, we need to come up with new designs for toilets that are hygienic, pleasant, and cheap to make and use, and work without connected to a grid.  Few universities are working on reinventing toilets.  "Bad sanitation is a problem not so hard to solve, if only we devote ourselves to spreading the wonders of the toilet."http://www.bloomberg.com/news/2012-04-08/to-seriously-improve-global-health-reinvent-the-toilet.html    

African Energy: Eastern El Dorado?

http://www.economist.com/node/21552265
This article discussed the recent major oil discovery in Kenya.  Eastern Africa is a region that has often been overlooked, but with the discovery of natural resources and particularly as these nonrenewable resources become more and more scarce the region will garner more attention.  The author discussed the lack of regulations on these resources in the country.  How do you think the government should involve itself in the natural resource market in East Africa and what effects will these discoveries have long term?

Taxes—Who Really Is Paying Up

http://online.wsj.com/article/SB10001424052702304356604577338122267919032.html?KEYWORDS=economic+system

Do you pay your fair share in taxes?

Even as President Barack Obama pitches the "Buffett rule" to ensure that millionaires pay at least a 30% tax rate, some commentators are decrying the fact that about half of U.S. taxpayers don't pay any federal income tax.

But our tax system is more complex than any sound bite or simplistic headline can illustrate.

Some multimillionaires do pay a lower effective income-tax rate than some middle-income taxpayers; receiving a chunk of your income via long-term capital gains rather than a paycheck is just one reason that happens. But the top 20% of income earners paid 70% of federal taxes in 2007, according to the most recent data available from the Congressional Budget Office.

Yet wealthy people bear a bigger share of corporate income taxes, which are ultimately borne by individuals. "All taxes have to be paid by somebody at some point," says Steve Wamhoff, legislative director at Citizens for Tax Justice, the liberal lobbying arm of the Institute on Taxation and Economic Policy, a research group. "The corporate tax is paid by the owners of corporate stock and business assets."

Sales taxes can have an outsize effect on lower-income people. "After they buy basic necessities, they typically won't have a lot of money left over to save or invest," says Mr. Wamhoff. A wealthier family is "more likely to have a portion of their income that they can put to savings or investments that will never be subject to sales taxes."

What about those 46% who don't pay federal income tax?

Wealthier people face a tax rate as high as 35% on earnings, "but they get the biggest tax breaks," he says. "They start off with such a high tax that the biggest tax breaks don't bring them down to zero. They're benefiting hugely from tax breaks—much more than the poor people—but because they start off at the high level, their tax bills stay positive."

That said, 1,470 millionaires were among those who paid no federal income tax in 2009.

Facebook defends CISPA while pledging not to share more data

A new bill has hit Washington. According to the article, CISPA will restrict legal barriers from obtaining information online. It will no longer require a warrant to access information published in social media sites. The Vice President of U.S. public policy for Facebook claims the bill will assist against cyber threats.

Why Germany Should Leave the Euro Zone

http://business.time.com/2012/04/12/why-germany-should-leave-the-eurozone/

We have all been hearing about the Euro crisis for a while now. Several people have suggested that the weaker  countries like Greece need to leave the Euro Zone as their domestic problems like their budget deficit are affecting the entire zone. However leaving the Euro Zone will leave them in a very harsh state from which recovery would be quite lengthy. The reason being their new local currencies will be devalued dramatically against the Euro making it even harder for them to repay their debts. This article proposes a different solution by saying that Germany should leave the Euro Zone. As the strongest economy in the Euro Zone, its new local currency will be higher in value to the Euro. This relatively lower value of the Euro will make it less difficult for the weaker countries to pay their debts.

Justice Dept. Sues Apple and Publishers Over E-Book Pricing; 3 Publishers Settle

http://mediadecoder.blogs.nytimes.com/2012/04/11/justice-files-suit-against-apple-and-publishers-over-e-book-pricing/?scp=4&sq=ebook%20amazon&st=Search

This is an amazing example of the government's role in intervention. The court suits Apple and publishers for price-fixing, which is a deliberate attempts to use oligopoly power to influence the price.The result of their action is a market failure and a higher price for consumers.

However, as the government intervenes and potentially lowers the price, publishers have least incentive to produce. In the battle with book pirates, publishers already loses much of their intellectual property rights and has much less profit than before. That being said, another punch from the government to knock off the price may negatively impact the production of books in the U.S.

Millionaires Can Rest Easy, Buffett Rule Still Has Loopholes To Exploit

http://www.huffingtonpost.com/2012/04/13/buffett-rule-loopholes_n_1423547.html?icid=maing-grid7%7Caim%7Cdl11%7Csec1_lnk3%26pLid%3D152117

This article focuses on the "Buffet Rule," President Obama's attempt to erase loopholes in current tax laws that allow the ultra-wealthy to pay lower rates than they are supposed to. Warren Buffet's statement that these loopholes "allow[ed] him to pay taxes at a lower rate than his secretary" is partially responsible for the reform. Unfortunately, however, Bloomberg has pointed out the fact that the Buffet Rule still needs to be significantly improved - that is, there are still numerous loopholes that will allow those affected to evade this reform. (http://www.bloomberg.com/news/2012-04-13/top-earners-can-find-ways-around-buffett-rule-minimum-tax-rate.html) The act is aimed toward people who earn more than $1 million annually with tax rates below 30 percent. Though their tax rates will be increased, they will still have the opportunity to invest their money in tax-free investments, such as employer-based health insurance. President Obama plans to generate over $40 billion from this increase in taxes, but if these millionaires continue to find loopholes (which they inevitably will), he may need to find other ways to shrink the steadily increasing deficit gap. Furthermore, it may have unexpected negative effects. Although it is a sad fact that some of the extremely wealthy are able to evade taxes in various ways, it is also important that we continue encourage investment and fuel the business cycle. The money for this investment comes from those who can afford to invest even in times of crisis - that is, people who are extremely wealthy. Raising taxes for this bracket, therefore, may not be the most prudent course of action in the first place - before we even take into account that rich people will avoid these reforms anyway.

Could Falling Prices Make Natural Gas the U.S.’s Primary Energy Form?

This is a good article that shows that in order for markets to work, we always need to be learning about and developing that market. For years, the US's primary fuel source was coal. Now our primary fuel source is oil. But with raising oil prices and Iran's threat to close the Straight of Hormuz, the US market for energy fuel is changing. Falling natural gas prices are going to change how consumers and producers across the nation use energy.

Worst Week For Stocks in 2012

http://money.cnn.com/2012/04/13/markets/stocks/index.htm?iid=HP_LN

This week was the worst for stock growth in 2012.  The NASDAQ dropped 2.3%.  The Dow dropped 1.6%.  S&P 500 dropped 2%.  The reasons behind the drop in prices include a poor March jobs report and the slowing of China's economy in the first quarter this year.  China's shrink in growth is not a concern to economists at World Bank, who claim 2012 will be a down year for China but 2013 promises to be much better.
China optimists point to China's easing of old monetary policies for hope in the future.  China pessimists point to a growing housing bubble that could burst like the bubbles in the US and Europe. 
The article indirectly deals with what we've been talking about in class.  China (the optimists hope) will experience more growth by changing away from old socialist monetary policies.  We have a clear cut example of China still being in a transition phase from Socialism to Capitalism.

Gene Munster Says Apple Is Going to $1,000

http://www.businessweek.com/articles/2012-04-12/gene-munster-says-apple-is-going-to-1-000

This article details the variety of reason why he believes the company's stocks will continue to climb at an alarming pace in the future.  A truly interesting article because this guy is an investor who literally loves Apple to death and has been able to properly predict everything in the past.

Consumer Prices Head Higher; Gasoline Costs Climb 0.9%

U.S. consumer prices rose modestly in March as falling electricity costs countered higher gasoline prices, boosting the view the U.S. Federal Reserve has room to provide more support for the economy if needed. 

The Labor Department said on Friday its Consumer Price Index  increased 0.3 percent after advancing 0.4 percent in February. That was in line with economists' expectations. 

The U.S. Federal Reserve has said it will probably hold interest rates super low into 2014 to help the economy, which is limping back from the 2007-2009 recession.

Amid recent signs of weakness in the labor market, investors are betting the Fed could unleash further monetary stimulus to boost growth, although comments by Fed officials this week suggested the central bank is on hold as it waits to see whether the recovery gains traction.

Should ideas be owned by their founders or the institution that funds them?

While we have previously in class discussed the importance of incentives for innovation, and touched on the specific mechanisms in place to distribute these incentives, we have not touched on the Bayh-Dole Act of 1980, which is an American law allowing universities to maintain patents of discoveries made by their faculty and researchers. This very system is currently under attack by the Kauffman Foundation, which seeks to move the patent into the hands of the inventor themselves.

I am inclined to agree with the author in this case, who supports Bayh-Dole and opposes the Kauffman foundation. Although there may be more incentives for the individual inventor if they are given control of the patent, they already have a significant incentive in additional proceeds they receive from the patent. On the other hand, if the university or company no longer has a financial interest in the patent, they will not have any motivation to provide researchers with the means to innovate. If the resources provided by the schools are not necessary for a certain innovation, the inventor may invent it outside the premises of the school and receive full financial reward for their labor. To keep the capital investment flowing, the institution must maintain some right to the finished patent.

Chinese Economy Loses Momentum

http://money.cnn.com/2012/04/12/news/economy/china-gdp/index.htm?iid=SF_E_River

The National Bureau of Statistics said Friday that the Chinese economy grew at a pace of 8.1% for the first quarter of this year. This rate was a decrease from last quarter, 8.9%. This is considered low for China because they have been around 10% growth for the past three decades. Economist fear that a slow down in China could affect the global economic growth. Chinese officials have increased the money supply and new loans to boost economic growth. One of the sectors that has slowed down is the manufacturing sector which may be a cause of a slow growth rate in the United States and the "shrinking eurozone economy."

Global Crisis and it's impact on India

This article discusses the global crisis that occurred in 2007 and what impact it had on the financial sector. The implications of the crisis was felt at an extreme level. The article details the elements that led to such a huge impact on India and the globe, as well as why the period of great moderation came to an end. 

http://www.bis.org/review/r120322b.pdf

The question of extractive elites Bankers and the public sector may both be enemies of growth

Buttonwood

The question of extractive elites

Bankers and the public sector may both be enemies of growth

Apr 14th 2012 | from the print edition

THE developed world has a growth problem. Of 34 advanced economies, 28 had lower GDP per head in 2011 than they did in 2007. Forecasts for growth in the current year are anaemic. This sluggishness is generally perceived to be a hangover from the financial crisis of 2007 and 2008. But might the problem be structural rather than cyclical?

In their new book, “Why Nations Fail: The Origins of Power, Prosperity and Poverty”, Daron Acemoglu and James Robinson, a pair of economists, suggest that many countries are bedevilled by economic institutions that “are structured to extract resources from the many by the few and that fail to protect property rights or provide incentives for economic activity.” In contrast, “inclusive” economies distribute power more widely, establish law and order, and have secure property rights and free-market systems.

In an extractive economy, such as the Belgian Congo and its successor state, Zaire, a narrow elite seizes power and uses its control of resources to prevent social change. Such economies can achieve growth for a while, particularly when (as with the Soviet Union in the mid-20th century and, the authors argue, China today) resources are being transferred from the unproductive agricultural sector into manufacturing. But they run out of steam eventually.

The authors place the developed world in the “inclusive” category since they have, by definition, achieved economic success. But their description of extractive economies should ring one or two alarm bells in the minds of Western readers. “Because elites dominating extractive institutions fear creative destruction”, the authors write, “they will resist it, and any growth that germinates under extractive institutions will be ultimately short-lived.”

There are two potential candidates for extractive elites in Western economies. The first is the banking sector. The wealth of the financial industry gives it enormous lobbying power, including as contributors to American presidential campaigns or to Britain’s ruling parties. By making themselves “too big to fail”, banks ensured that they had to be rescued in 2008.

Much of current economic policy seems to be driven by the need to prop up banks, whether it is record-low interest rates across the developed world or the recent provision of virtually unlimited liquidity by the once-staid European Central Bank. The long-term effects of these policies, which may be hard to reverse, are difficult to assess.

It is tougher to argue that the financial sector has inhibited growth in other areas of the economy. Indeed, both banks and venture-capital groups play a vital role in supporting new companies. Nevertheless, it is possible that the extremely high rewards in the financial industry might have diverted talented people away from other activities that could have helped rich economies to grow more sustainably. Furthermore, those high rewards could derive from “rent-seeking” by the financial sector, in the form of fees, charges and spreads, that have acted as a tax on the rest of the economy.

A second candidate for the extractive-elite category is the public sector. In some countries, such as Greece, there has been a clear policy of “clientelism” in which political parties have rewarded their supporters with jobs and benefits that have been funded by the general taxpayer. In the Anglo-Saxon world, public-sector employees now have more generous pension rights than the majority of private-sector workers.

An obvious objection to this line of reasoning is that there are too many public-sector employees for them to be regarded as an elite. Indeed, if you include the many recipients of social benefits, those dependent on the public purse comprise a majority of most rich-country populations. Such social policies are part of the inclusive model that Mr Acemoglu and Mr Robinson favour.

But it does seem likely that a high level of public-sector employment reduces the extent to which creative destruction occurs and new industries develop. Workers may prefer the security of government jobs to the riskiness of joining new businesses. As European governments are discovering, public-sector unions are often the most vocal in opposing the kind of labour-market reforms needed to reduce structural unemployment.

Just as a ship’s hull acquires barnacles, a government naturally attracts all kinds of supplicants and subsidy-seekers. If such behaviour is unchecked, then eventually the system may grind to a halt.

Investment Dependency

This short article and graph talks about how heavily some of the rich countries of the world invest. They had invested heavily when times were good, but once the financial crisis hit, they have seen little to no return on their money for obvious reasons. I just found this interesting because these countries were borrowing heavily overseas from other nations, and it in turn got them in trouble as the excess supply of cheap credit fueled their mass spending sprees, which later collapsed in the financial crisis.

http://www.economist.com/blogs/graphicdetail/2012/03/focus-2

Cut Public Debt Levels to 50% of GDP: OECD

The OECD said research suggests that changes in the functioning of the economy occur around debt levels of 70 percent to 80 percent of GDP.

“Interest rate effects of debt seem to become more pronounced, discretionary fiscal policy becomes less effective because offsetting private saving responses become stronger and trend growth seems to suffer,” it said.

As a result, for a standard country, “building in a safety margin to avoid exceeding the 70 to 80 percent levels in a downturn suggests aiming for a 50 percent or even lower long-term debt target during normal times,” the report said.

http://www.cnbc.com/id/47026928

Slow Down Forecast for Developing Asian Countries

http://www.nytimes.com/2012/04/12/business/global/slowdown-forecast-for-developing-asian-economies.html?_r=1&ref=business

The Asian Development Bank has announced that the countries will be slowing their growth somewhat this year however it will still be higher than Japan, the U.S., and Europe. Like most countries, those in Asia are still bouncing back from the recession, however their growth rates are expected to be around 6.9% this year while all other developed countries are estimated at 1.7%. The bank feels very optimistic because China and the demand for their goods has continued to stay strong. These countries have remained out of deep trouble by avoiding most of the U.S. housing crisis and the debt crisis in the euro zone. Europe is still struggling and there are possibilities that downfalls in Europe could affect Asia so they aren't in the clear yet.

US interest in Brazil, and its trade, on the rise

http://www.economist.com/blogs/democracyinamerica/2012/04/dilma-rousseffs-visit-america

 How many Americans know about the economic successes of our South American neighbor during our economic troubles?  Very few, though there are downsides mentioned in the article.  Working with this nation would begin improving America's standing in Latin America and give a profitable place for American businessmen to invest, something they have not done much of here.  Getting money following again is one key step to an American recovery, and goodwill is something America needs now.

U.S., China, Japan lead world in economic growth

This article discusses a recent report from today that discusses economies that are leading the world. According to the report, the economies that are currently leading the world are the United States, Japan and China. The U.S. economy has grow the most out of the three, growing for the past five months; and Japan and China are both following closely growing for the past four months. The article discusses how growth in manufacturing and in spending have been the main contributors to China's expansion. The question that was left up in the air was whether China's economy will have a hard or a soft landing on the way back down from this substantial period of growth?

http://money.cnn.com/2012/04/10/news/international/oecd/index.htm?iid=HP_LN

Obama to Visit Swing State to Push His Millionaire Tax

Tax is a topic that is relatively new in human history. It only became a part of society with the rise of mercantilism. However, it has become one of the biggest issues in the economy. Should it be a tool to redistribute wealth? or should it be a tool for revenue for the government to provide the public goods, such as defense? it is quite difficult to answer. However, I believe that you can't tax the one without money, you can only tax those that have the capabilities to pay tax. President Obama is doing just that. He is pushing for an increase in tax on those who can pay the tax. But this would require not just a higher rate, but overhaul in tax system. Overall, we still have to wait and see who is going to be the next president. This is only a proposal.

Obama names surprise World Bank candidate Jim Yong Kim

Reported by BBC news, on 23th March, President Obama nominated Jim Yong Kim as the candidate of the next president of the World Bank.

This nomination is obviously surprising because he was not mentioned in any analysis about possible candidates in the past weeks. Jim Yong Kim, a Korean American, was born in Seoul. He majored in medical, and he's an expert on health in developing countries. He was a co-founded Partner in Health, providing health programmes for the poor people, also a student at Harvard University. He is now the president of Dartmouth College, one of the United States’ most prestigious academic institutions. As a former official at the World Health Organization, which is a very important area of World Bank, Dr. Kim is no wonder a fitting candidate, even though also surprising.

This development expert seems to be a nice fit and he indeed has got much praise from people in different areas. But at the same time, he still has two other strong competitors: Mrs Okonjo-Iweala, the Nigerian finance minister and a former high level executive at the World Bank, nominated by three African countries - Angola, Nigeria and South Africa; and Jose Antonio Ocampo, the former finance minister of Colombia and currently an academic at Columbia University. Both of these two candidates have rich experience in developing countries and development issues.

Even though the three candidates seem to have a very balanced capacity and experiences, the nomination of Dr. Jo Yong Kim is actually a formality. Like what we have learned in class, the election of the president of World Bank is bases on the organization’s board, which is made up of 25 representatives of the member countries. The votes are weighted by financial contribution. The US has almost 16% of the vote. Although European Union countries have a bigger 29%, but “in order to preserve the long-standing informal deal which has seen the World Bank run by an American and the IMF by a European”, it is almost for sure that the European Union will respect the opinion of the United States. It is clearly that the election will only follow the wish of the United States.

Forced Prostitution in Spain

I'm sure that most of us are aware of the trafficking exists all over the world, because there is such a large market for prostitution. What's the point of this article, if trafficking is a worldwide phenomena?

Spain has increasingly become a destination for sex tourism, because the laws are rarely enforced and enslaved women who are tricked into this business are not considered illegal immigrants, again due to lax laws. From what we learned in Economic Systems, slaves exist because there is a need humans in an area that lacks adequate human resources. There is no black market in Spain and the costs of these services are lower than in France where a black market does exist and prices are higher. It is also important to note that the younger generation are interested in this market and creating more short term and long demand for prostitution.


http://www.nytimes.com/2012/04/07/world/europe/young-men-flock-to-spain-for-sex-with-trafficked-prostitutes.html?_r=2

France's Future: A Country in Denial

This article is about France's future, and the upcoming presidential election that they are having. Regardless of who the candidates are, the point of the article is how all of the candidates are not truly acknowledging or tackling the major issues that France has coming up, such as high taxes-- the candidates are merely making 'promises' of what they're going to do. Some of France's major problems is that their public debt is at 90% (haven't balanced their books since 1974), unemployment is high (hasn't fallen below 7% in 30 years), the banks are undercapitalized, and more. The harsh reality is that France cannot ignore the ugly truth and that they must face reality. I find it interesting to see how the lack of realism that the French have will affect their future.

http://www.economist.com/node/21551478

March jobs report: Hiring slows, Unemployment falls

The March job report showed that hiring has slowed, as the 120,000 jobs added during the month fell short of economists' expectations. In February, the economy added 240,000 jobs. Unemployment fell to 8.2%, as 164,000 workers left the market, which mostly included white women. Part of the slowdown may have been attributed to the unseasonably warm winter months in January and February. The retail industry was hit the hardest, with almost 34,000 workers losing their jobs. On the other hand, restaurant and bars created almost 37,000 jobs. Of the 8.8 million jobs lost during the financial crisis, only about 3.6 million have been added back, so we are still not out of the dark. On another positive note, the underemployment rate fell to 14.5%, the lowest it has been in 3 years. Yet Republicans are reacting to the job report by slamming Obama's record.

Europs pain is coming Americas Way

This article tackles the debate of the enormous deficit that the United States is currently building. A deficit that according to the article that is about 10% of GDP and a debt that is roughly 100% of GDP. The question at hand is who will have to bear the tough times ahead, adults or their kids.  This article attacks this question with some humor by referring to a young dutch boy who won a prize for entering a plan for getting the Greek economy back on its feet.  This article points out three major factors, deficits do matter and sooner or later will have to be cut, trying to cut deficits in the middle of a recession only makes it worse, and when in fact the cutting starts it will cause massive social and political upheaval as well as pain.  Comparison of the United States and Europe is important to recognize because Europe is feeling the pain that many feel will spread to the United States.  So the question is, wait to attack the issue later and let future generations suffer the consequences or start to handle the situation now and help ease the pain of future generations by taking some of pain now.  The issue is no one ever wants to suffer economically so, taking the cynical view, we will in fact pass it on to future generations since no one will step up and do the right thing.

In China, Following in Footsteps of Reform

In China, Following in Footsteps of Reform

The article discusses the biggest political challenge in decades that is occurring in China. This political challenge includes changes in the top leadership position, hidden forces in the party, and military and economy battles over China’s future. One of the country’s leading scholars, Yu Jianrong, has dropped a detailed proposal for political reform that begins in October this year and ends a decade later, in September 2022. His political reform includes political machinations, an ambitious program for change, and an autocratic state. Additionally, a political scientist at Tsingshua University, Liu Yu, has focused on how China is rooted in shifting attitudes across society, which is a move linked to technology and globalization. This however is “unrealistic” and a broad debate is needed. She stated that “a good plan should involve the whole society” and that “there should be a big debate on where the country should be going.” Therefore, these ideas and reforms can bring change to the country and they can open people’s minds and raise awareness on the challenges occurring in China.