Friday, March 9, 2012
The article also said that American's wealth increased by 2.1 percent, that stocks were going up, and that household wealth (which is the measure of value on assets like houses, banks, and stocks) has also increased and is slowly approaching its pre-recession peak of $66 trillion (which is a good thing).
So what I'm seeing here is that even though the government is experiencing a deficit, the wealth of the American people is increasing. I think this is saying something about tax refunds and what they're doing for our economy right now. The report spoke of the $25 billion income tax refund like it was a bad thing, but what it I actually see is that it more likely helped the U.S. economy, rather than hurt it. This refund put money back into American's pockets, which they then spent and invested in stocks.
Now let's refer back to the Bush tax cuts. After taking in all this information doesn't it seem like a cut in taxes is a pretty good idea? The government may not be getting as much money, but the economy is still growing.
The weakness of this model, as explained in this star telegram article, is that our state looks highly unattractive to companies that need vast amounts of land for development, factories or for storage to operate their businesses. While the corporate tax rate is also low, the property tax for running a large scale operation would be astronomical. This article explains that Texas, in reality, actually has a medium to high tax rate. Texas also has the 5th most regressive tax model in the country.
Read more here: http://www.star-telegram.com/2011/09/25/3395762/is-texas-really-a-leader-in-low.html#storylink=cpy
Wednesday, March 7, 2012
United Airlines made an agreement with Continental Airlines to buy them for 3 billion plus dollars making them the world’s largest carrier with commanding positions in top countries. The new United Airlines would pass up Delta Airlines in size which would help in attract more high-fare business travelers. The new Untied would travel to 370 destinations in 59 countries. The airlines said that combining the two companies they would save an average $1 to $1.5 billion dollars a year while generation $800 to $900 million but 2013. This would be a new yearly revenue. Before the merge of the two companies, both were losing money due to high fuel costs. Both companies also shrunk in size prier to making the merging agreement. The merge of the two companies will also create more jobs which then people will have more money to inject into the money flow cycle of America. However this new big company will bring even more competition for struggling airline companies like American Airlines.
Thursday, March 1, 2012
As a company, spending money anywhere but America would be considered a leakage to our economy-exactly what we don't want. We want as much money circulating in our economy as possible so as to ease ourselves out of our economic recession. That seemed to work during/after WWII, when the world relied on us to provide materials and goods for them. Our citizens were employed and working diligently in every industrial area. America was gleaming with pride, or so the old people tell me.
Today it is difficult to simply single out and describe/predict the goings-on of America's economy, for we are overwhelmingly involved in the global economy. Countries trade and rely on each other, and consequently feel the repercussions of such through the strengthening and weakening of their currencies. This article says that since the 80's, the U.S. dollar has weakened by approximately 20%. This is actually good. A weak dollar makes for a high demand for our goods on the international market.
Bob McTeer, the author of the above article says that our weak dollar will help aid us in recovering from this recession. On the flip side, a strong currency would be beneficial so as to "support our rising standard of living". So, we would preferably want a weak currency now, and a strong one once we recover again.
Wednesday, February 29, 2012
The advantage of starting a new book from anywhere is something any bookstore wouldn’t be able to keep up without embracing the digital format. E-books has created big changes in the bookstore market. Now that E-books are very popular and easy to use, more and more bookstores are going out of business. Privately owned stores are being the most effected because they have to keep up with the growing demand of on-line books. What makes Barns & Nobles the number one on-line book store is that they sell over one Million digital books. Barns & Nobles one million digital book’s makes it hard for competitors to reach a point to where they can really compete with Barns & Nobles therefore making them the dominating bookstore chain. But even Barns & Nobles is losing money. They are suffering a net loss of about $63 million for the third quarter of 2010.
Wednesday, February 22, 2012
"This is not class warfare; it's math," is what Obama said about his plan on raising taxes for the rich to make $1.5 trillion dollars in ten years for the US. Would imposing a higher tax rate for the wealthy in America really in the long run of things, help us out. Taking money away from the rich would have a negative effect on the economy because the wealthy would cut down on their spending. With America’s economy in a recovery this is not the time to be taking money out of the flow of money cycle of the US. Much like the problem in Greece is that their government is spending more than they are making. Does this sound familiar? American need to cut back on spending through unneeded agencies and scaling back on new spending. We need to fix the problem and not try to cover it up by increasing taxes to the rich.
Tuesday, February 21, 2012
Greece was about to go into default if it wasn't for a 130 billion euro bailout. The 17 countries that make up Europe came together and talked for 12 hours and came upon the agreement that would financially reinstate Greece back into the country. The news of the GDP of Greece's debt projected to come down by %120.5 by 2020 lead to an increase in the value of the euro. If it were not for this deal, Greece was going to face a very bad situation and possible relocation from the eurozone. But why would Europe want to kick out Greece? This is because Greece is not only hurting from its economic downturn, but it is also hurting the rest of the eurozone since they all use the same currency. It is not a surprise that Greece's private investors were asked to take a hit on their high interest rates dropping the face value of return by %53.5. The high interest rates on loans that Greece took out for expenditures were very burdensome and took a toll on the country's economy.
Monday, February 20, 2012
Thursday, February 16, 2012
On January 21, 2010, the Supreme Court ruled that corporations and unions cannot have restrictions put on their expenditures towards presidential campaigns, essentially giving them the same right as human beings. To agree or disagree with the ruling that corporations are people is strictly a political matter, and the opinion is all yours. However, what I would like to examine is the change in the rules of the game--how big money now has the ability to control the elections.
Money has always been influential in elections. The most seizable donations made to a campaign, however, would typically come from wealthy individuals or families. Now, corporations and unions can donate obscene amounts of money to the runner's super pac, so long as they don't in any way, shape, or form, "coordinate" with the candidate. But there are so many loopholes that this clause is easily circumvented.
Do you think this is fair?
Wednesday, February 15, 2012
After last Saturday death of super star Whitney Houston, her album sales went through the roof. The same happened with Michael Jackson in 2009. Since his death, Jackson has made 1 billion dallors and sold 9 million more albums. After these artists death iTunes as well as their record label increased the price of their albums. Just after a couple of hours after Houston's death the price of her cds went from $4.99 to $7.99 on iTunes. Because of their death, the demand for their CDs increase and people were willing to pay a higher amount because the artist has became more popular. Houston and Jackson once again topped the music charts after their deaths. After several people complained publicly about how the increase in price was being " greedy", the price went back to normal and people continued to purchase their albums.
Monday, February 13, 2012
Thursday, February 9, 2012
A way to combat unwanted inflation in any economic system is by raising interest rates, something the Chinese government has been unwilling to do. This is for two big reasons: A) this would attract international money into the country, therefore strengthening the Chinese currency the Yuan. The government finds this undesirable, as demand for their exports is high while the global market is depressed, strengthening their currency would only make their exports less appealing. Or perhaps they resist strengthening the Yuan because of pride issues, something the Chinese undeniably suffer from. They conclude their currency is fine where it is, and inflation can be dealt with in other ways.
New government stimulus policies has lead to a growth in bank lending, which leads to reason B) why China can't hike up its interest rates. Increasing the interest rates would leave more debt in the hands of Chinese businesses and corporations, and all borrowers for that matter.
So the Chinese government is taking a different approach, most unconventional than usual methods of controlling inflation. The banks are to be given certain amounts of money they must store in the bank, hopefully limiting how much they can lend. But it gets more complicated. This method of withholding money from borrowers is due to fail. Therefore the Chinese are going all rogue-communist on economic practices by controlling the price on staple Chinese foods. This, of course, calls for a delicate balance of supply and demand, or as Schuman calls it, "reserve ratio [increase] and price suppression".
Wednesday, February 8, 2012
Tuesday, February 7, 2012
Monday, February 6, 2012
Wednesday, February 1, 2012
There is a grey area in which the numerical figures are to be calculated. We cannot say that money is lost from the industry as it is uncertain if a person who illegally downloads a movie would have actually bought it in the first place. In this instance, the entertainment is at the expense of the entire film crew, but not even. On the other hand, there are cases in which thousands upon thousands of works are downloaded immediately after release, quite at the expense of the industry.
While there may be detrimental damage done to the music/film/television industries by online piraters, there is no harmful repercussion done unto our economy. Money not spent on a $20 movie winds up being spent elsewhere.
As SOPA, the Stop Online Piracy Act, has been pulled from Congress' agenda due to severe uproar amongst the citizens of America, the ball is in the entertainment industry's court. My guess is that Congress will create a new Anti-Piracy Act, but one slightly more lax and less threatening of American's first amendment rights.
Tuesday, January 31, 2012
Everything has cause and effect. If you kick a ball, the ball will roll. If you tease a cat, the cat will growl. If you put your hand in a pot of boiling water, your hand will burn. We see this a lot in our economy, especially now in the housing industry. And this isn't any ordinary industry: It's a driving force for the entire economy, and your government is trying to suck it dry.
When you buy a house, you have to buy appliances, furniture, utilities, etc.. This in return creates jobs for the people, to make washers and dryers, to make chairs and beds, to run operations so that way we can have clean water; and it's all because of housing. But in April of 2010, the Dodd-Frank Act was passed just shortly after the Financial Crisis of 2008. While the Dodd-Frank Act might seem lengthy with its 2300 pages implementing 400 new regulations, it has one sole purpose: To over regulate the Mortgage industry.
If you were a car salesman, could you imagine how you would feel if the government told you that the maximum commission you could make on any car was 50$. It doesn't matter if you sold a Nissan Leaf or a new Bentley, all you could make was 50$. That is what they have done to the Mortgage industry. They made all loan officers make the same amount of money on any given loan. They have changed the way appraisals, title fees, flood certifications, and credit reports are all processed. This makes it longer to get a loan, because it costs more to get it passed which then goes down to the consumer. It is a sickness, it is broken. The mortgage industry will resurrect the housing industry, and by crippling it with oppressive legislation is doing an injustice to the people, an injustice to America.
Monday, January 30, 2012
Thursday, January 26, 2012
Our country is staring at two broken codependent dimensions: government and economy. As we operate under a mixed economy, incorporating necessary government restrictions and intervention onto an otherwise free market, these two pillars of our country transform and affect one another invariably. Meaning, when the housing market tanks, unemployment skyrockets and more Americans depend on welfare than ever before, Washington divides- more so than its current state -and rips the country in half. The House and Senate are brimming with conflicting arguments and proposals, under-the-table deals and partnerships to block this or that piece of legislation, all of which inevitably leads to the current state of our union: a stalemate.
The solution? Perhaps a clean slate- all new representatives and senators to fill Congress with new ideas, new methods of operation and hopefully a more realistic optimism than that which appears on the President's face. Opposition for the sake of opposition plagues Congress now. Naturally, this rather immature emotional response to the current crisis trickles down into the constituants, as they listen to their congressmen gripe about how he or she COULD have progressed further in this past session, but it was Congressman so-and-so who thwarted his/her proposal. At this point not only in Congress divided, but all citizens of America start pointing fingers at their political enemies.
Certainly at a time of great economic crisis, such antagonism is more than detrimental. The problem to fixing the economy starts in Washington. But when Washington is broken, there's little to be optimistic about.
Wednesday, January 25, 2012
Tuesday, January 24, 2012
Adj. 1. irresponsible not showing or done with due care for the consequences of one's actions or attitudes; reckless
Does President Obama really love our country? Is he a responsible leader? Just recently on December 12, 2011 Obama asked congress to raise the Debt Ceiling by $1.2 trillion. Now flashback to July 3, 2008, when then Senator Obama adamantly proclaimed that President Bush was both "unpatriotic" and "irresponsible" for raising the same Debt Ceiling. Wait, did Obama just really contradict himself? So why did Obama so quickly change his tune now that he occupies Bush's previous post? Maybe because at his core he is simply a hypocrite. I think it's because he will say anything to make himself look good to his liberal base. However, one could simply reason along the lines of what Ed Morrissey, columnist/blogger/political activist, states in the following quote, “if Obama can use the increase in the national debt to question Bush’s patriotism, doesn’t it follow that increasing deficit spending by 152 percent per month makes Obama 152 percent more ’unpatriotic’ than Bush?” Either way, it doesn't cast a positive light on Obama. While everyone is entitled to their own opinion, I believe that Obama is set on this country transitioning from a mixed economy to a commanding one. For example, consider the following; The Affordable Care Act that basically gives everyone health insurance (sound like Canada, eh?), a vary large number of current Federal Employees make up a group that currently owes over $1 billion in delinquent taxes to their employer the Federal Government (someone turning a blind eye here?), and now our Debt Ceiling is being raised once again, thereby continuing to allow our out of control government to, according to Obama's own words, act in an unpatriotic and irresponsible manner to spend more money than we collect. So now, I challenge you the reader, to decide if Obama is really as unpatriotic and irresponsible as he lambasted Bush for being in 2008 or is he simply just a hypocrite and says whatever he thinks sounds good to his adoring fans.