Russia, China, America

Article: http://www.forbes.com/2010/04/22/china-russia-politics-tension-markets-economy-oil-gas.html

Russia and China are in a battle to take primary control over newly independent Central Asian states. The two countries were working to keep these countries under their eyes, but now they seem to have different views on the situation. This stems from the difference in China and Russia's economies. Chinese economy grew by 8.7% in 2009 while Russian economy fell by 7.9% in 2009. China has begun to take over. Russia had to even borrow money from China in order to complete the Central Asia Natural Gas Pipeline which runs from Russia to China through such countries as Turkmenistan, Uzbekistan, and Kazakhstan. Because of the tensions between China and Russia the U.S. has become the favorite of many Central Asian countries. America's main goal in this situation is to gain new insight into the war in Afghanistan. If there is stabilization in Central Asia then Afghanistan would improve.

The U.S. has always wanted to have control over other countries.America is especially known for its interest in Latin America. Because of this I am not surprised that the U.S. is taking advantage of Russia and China's differences. In order for the U.S. to fulfill its wish for control it must relieve Central Asia from its dependency on Russia. Next the U.S. must use its distance from Central Asia to its advantage and try to help resolve problems acting as a neutral power. Next the U.S. must opendly communicate with Central Asia about its most difficult problems such as, "the dearth of educational and economic opportunities."

I think that the U.S. will be able to take advantage of the tension between Russia and China in order to gain some kind of control over Central Asia. Because Central Asia is so important to the war in Afghanistan gaining some power in Central Asia could be beneficial. I personally do not think that the U.S. should get itself into any more trouble!

Terms:
GDP- Gross Domestic Product (A value measure of the flow of domestic goods and services produced by an economy over a period of time, such as a year.)

Central Asia- a region of Asia from the Caspian Sea in the west to central China in the east, and from southern Russia in the north to northern India in the south. It is also sometimes known as Middle Asia or Inner Asia, and is within the scope of the wider Eurasian continent.

Gas Pipeline-a transmission system for natural gas or other gaseous material.

Pink Slips Throughout the Country

Article: http://www.npr.org/templates/story/story.php?storyId=124905425

Throughout America teachers are at risk of losing their jobs. I find this particularly disturbing. When I think about it I think that a lot of the teachers that taught me how to multiply or how to read might be without jobs next year. If you think back to our elementary and middle school days who were those teachers that you valued the most. Children will not have as many teachers to value now. In California 22,000 teachers have received pink slips. Schools are having to compromise on ways to save money in order to keep teachers in work. In California schools increased class size in order to keep teachers but in Florida there is an amendment in the state's constitution that prohibits class sizes over 18 students. This amendment in Florida has cost the state $20 billion. There are also many mandates that schools have to follow that cost a lot of money. In California mandates have cost school more than $400 million a year. California's governor, Arnold Schwarzenegger, has suggested suspending some of the schools' mandates until next year.

This problem has long been coming and people have been anticipating pink slips. The root issue behind the school budget problem is the economy. Many states have been gaining large budget deficits. California has a deficit of $20 billion and growing. It is sad to say but the schools are where the funding decreases first. I think that the lack of school funding is going to be very detrimental to future generations. This issue makes me think that the government is looking in the present and is not taking into consideration the future effects on the economy. A lack of school funding could lead to a lower quality education for kids and eventual lead to lower college going rate and therefore could lower the standard. I think that the government should find other things to take funding from that is less detrimental.

Terms:

Budget Deficit: A budget deficit occurs when an entity spends more money than it takes in. (Google def)

Pink Slip: Slang term for an employees termination notice (investorwords.com)

Mandates: a document giving an official instruction or command (Google def)

Rum War

Article: http://www.npr.org/templates/story/story.php?storyId=124694354

We all know the name Captain Morgan. This brand of rum is very popular in the United States and it is owned by Diageo which is located in the U.S. territory of Puerto Rico. The production of the rum is being relocated to the U.S. territory of the Virgin Islands. In return the Virgin Islands are paying Diageo $2.7 billion over the next 30 years. Some say this money should be spent on the people of the Virgin Islands. The money comes from a fund that the U.S. government gives to the Virgin Islands and Puerto Rico from an excise tax on the rum sold in the States. This switch in production location is upsetting many people in Puerto Rico and some are going to Congress to create restrictions on the way that the money from the rum fund can be used.

On December 10, 1898 Spain gave Puerto Rico to the United States in the Treaty of Paris which was ratified by Congress in 1899. In 1917 the United States bought the Virgin Islands from the Danish for $25 million in gold. These two countries are under watch of the U.S. government. The money that these countries receive from Congress for rum will continue to cause many problems. Puerto Rico's economy will suffer and could lose billions over the next 30 years from the change in location on Captain Morgan production. This situation could also lead to hostile attitudes between the two territories and even those Congress members who are on opposite sides of the issue.

Terms:
-territory: a territory is a non-sovereign geographic area which has come under the authority of another government; which has not been granted the powers of self-government normally devolved to secondary territorial divisions (Google definitions)

-Diageo: the world's leading premium drinks business with an outstanding collection of international brands across spirits, wine and beer. (Diageo.com)

-Excise taxes: A Federal or state tax imposed on the manufacturing and distribution of certain non-essential consumer goods. (investorwords.com)

THE FED

Article: http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=348876&story_id=15606321

We all now know that the Fed is and this week I found a great article talking about the Fed today. The Federal Reserve is facing a lot of troubles right now. The House of Representatives has passed bills to audit the Fed's decisions and strip the Fed of some of its powers. Chris Dodd, chairman of the Senate Banking Committee, is preparing a financial-reform bill that would have originally taken the over-sight of banks away from the Fed. Dodd wanted to give that power to a new agency, the Consumer Financial Protection Agency. In order to have a chance at passing the bill Dodd had to collaborate with a Republican to gain Republican support. He spoke with Bob Corker and they have come to a possible compromise of making the Consumer Financial Protection Agency a part of the Fed. President Obama also has the chance to nominate three new members to the board of governors. He wants to nominate strong candidates in macroeconomics, markets, regulation.

The Fed has had the power to regulate since it was created in 1913. With three spots on the board of governors open President Obama and the Senate have the power to change the way the Fed operates. It is most likely that President Obama will choose "candidates who are tough on banks and soft on inflation." I think that with these new bills and new candidates for the board of governors the Fed could change forever. Bank regulation will become more restricted and harsh and we could see some struggles with circulation during the changes.

Terms:

Senate Banking Committee- one of twenty Senate committees tasked with conducting Senate business related to specialized areas of legislative interest

macroeconomics- The big picture: analysing economy-wide phenomena such as growth, inflation, and unemployment.

 audit- examine carefully for accuracy with the intent of verification

Chilean Earthquake

Article:
http://www.economist.com/world/americas/displaystory.cfm?story_id=15591569&source=features_box_main

In the aftermath of the earthquake in Haiti a huge 8.8-magnitude earthquake hit Chile early on Saturday February 27, 2010. Michelle Bachelet, Chile's President, estimates that 1.5 million homes were damaged and 2 million people were affected by the quake. There are collapsed buildings and roads. There is also a prison wall that collapsed allowing 300 inmates to escape of which only 60 have been recaptured. This earthquake, though larger than Haiti's earthquake,has had a lesser impact on the country. Chile is a much more wealthy nation than Haiti and has a much better infrastructure. Unlike in Haiti the people in Chile will be able to receive medical care rather quickly.

Chilean earthquakes are not rare. Chile lies along the Pacific “ring of fire" which is one of the most seismically active zones. In the past 37 years Chile has experienced 13 earthquakes with a 7-magnitude or greater. This fat has made Chile a durable place for earthquakes. The building codes are very strict and Chile has the money to enforce these codes, unlike Haiti. How will this earthquake affect the economy? I think that this earthquake will make a dent in the Chile economy. Many businesses will be out of business for weeks. On the other hand. the many collapsed buildings and roads could call for an increase in jobs.

Vocabulary:

Michelle Bachelet- Chilean President

Pacific "ring of fire"- "is an arc stretching from New Zealand, along the eastern edge of Asia, north across the Aleutian Islands of Alaska, and south along the coast of North and South America. The Ring of Fire is composed over 75% of the world's active and dormant volcanoes."

 

http://atlas.nrcan.gc.ca/site/english/maps/environment/naturalhazards/volcanoes/fig_2_volcanoes_pac_ringfire.jpg/image_view

Infrastructure- the fundamental facilities and systems serving a country, city, or area, as transportation and communication systems, power plants, and schools

How the Weather Affects Jobs

Article: http://blogs.wsj.com/economics/2010/02/19/february-jobs-report-may-be-impacted-by-blizzards/?mod=rss_WSJBlog&mod=marketbeat

Everyone has heard about the intense blizzards in the Midwest and Northeast that have left people unable to go out of their homes. Has anyone thought how this could affect the February job report. The firm Macroeconomics Advisers forecasts a drop in the job report. Because of these blizzards workers have been unable to go to work and companies have lost some customers. It is expected that because of these blizzards companies have held off on hiring new workers until March when the weather is thought to clear.

In the past, job reports during extreme blizzards have shown low numbers. In January 1996 there were blizzards that showed a drop in jobs of about 60,000. This is being used as an estimate for this months job report. How does this affect the economy? Well, because this month's job report will be impacted by the weather then it could correlate to a lower amount of consumerism for this month. Less people are working this month so there could be less activity in the market. Hopefully March will show a bounce back and the market activity will increase slightly.

Terms:

-Macroeconomics Advisers: the most trusted source for U.S. macroeconomic analysis. MA is known for its
ability to combine a rigorous, model-based approach with keen judgment to produce award-winning forecasts and insightful commentaries.

-Job Report: A report released every month that describes the gain or losses in jobs for that specific month.

-Firm: Any business, such as a sole proprietorship, partnership or corporation.

Lights, Parks, Police Oh My!

Article:
http://www.npr.org/templates/story/story.php?storyId=123691065

Do you walk in the streets at night wondering if the street lights are going to turn off, leaving you in the dark to find your way? Do you walk through the parks in your city picking up trash at every step you take having no place to go to the restroom? Do you walk in the city seeing less and less policemen and firemen everyday? Well, most of us would say no but for the residents of Colorado Springs, Colorado these things are a reality. The city has turned off street lights, stopped much maintenance in parks, and cut the number of policemen and firemen in the city.

These are just some of the ways that Colorado Springs is attempting to fill the $28 million budget gap for the city in 2010. Why is the city government making these cuts? Some say that this is a typical tactic of the government to make public cuts to make people feel some kind of suffering. Is this tactic a good tactic? Does it work? I would say not. I believe that this tactic gives the people of the city and country a lack of pride in their government. If the city can not provide a clean park or lit street for children to walk home on then how can the government provide the people with solid healthcare and schools? I believe that if more cities make these kinds of cuts then the American confidence in the government will drop and our infrastructure may begin to crumble.

Terms:
National League of Cities-"the oldest and largest national organization representing municipal governments throughout the United States"

Revenue: the entire amount of income before any deductions are made.

Budget Gap: The amount of money by which a government exceeds the set budget.

America and Canada, eh?

Article:

http://online.wsj.com/article/SB10001424052748703894304575047282403176858.html?mod=WSJ_economy_LeftTopHighlights#articleTabs%3Darticle

Definitions:

• Procurement: Acquisition of goods (materials, parts, supplies, equipment) required to carry on an enterprise.
• World Trade Organization: the only global international organization dealing with the rules of trade between nations. For more information go to-http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm
•  Municipalities:  A political unit, such as a city, town, or village, incorporated for local self-government

 The United States and Canada are attempting to reach a deal on the "Buy American" provision in the U.S. Stimulus package. This deal could potentially allow for both the U.S. and Canada access to procurement contracts at local and state levels. The Stimulus package requires U.S. manufactured products to be the only products used in stimulus funded projects. The U.S. and Canada have agreed, in this deal, to give permanent reciprocal access to 37 U.S. states and Canadian provinces and territories. These are areas covered by the World Trade Organization's procurement agreement. These two countries would also have temporary access to other projects across the borders. The agreement is hoped to be signed on February 16, 2010 and the countries have plans of discussing in a year about making temporary procurement agreements permanent.

What is this "Buy American" provision in the stimulus package? They basically state that any project that is funded by the stimulus package must get all of its manufactured products from American manufacturers. They also gives the heads of federal departments the ability to waive this provision for multiple reasons. These reasons include whether the provision would not coincide with public interest or whether the manufactured goods made by American companies used in a project would increase the cost by more the 25%  or whether the goods manufactured in America were not sufficiently and reasonably produced. To read more about the provision go to http://www.forbes.com/2009/02/23/buy-american-stimulus-opinions-columnists_wto_trade.html. This provision has frustrated not only Canadian companies but also American companies. This deal will hopefully help the trade relationship between these two countries. Between 2008 and 2009 trade between Canada and the U.S. has dropped dramatically.


Will this deal help? Many say that this deal will help but that there will still be much to fix. A U.S. trade representative spokeswoman said that this deal would give companies in Canada access to 7 programs that have an estimated value of $18 billion which is minuscule in comparison to the $787 billion in the stimulus package spending. Personally, I think that this deal will most likely not help the U.S./Canada trade numbers. America's reaction to Canada is a clear example of how America is likely to act with other countries. This could be detrimental to President Obama's plan to double American exports within five years. How can we increase our exports without a good name in the trade game?

The Jesus Tablet

This entry will focus on the information provided in the linked news article below

http://www.economist.com/opinion/displayStory.cfm?story_id=15393377&source=hptextfeature
 
Apple has created a new product called the iPad. Apple is know to excel at taking an existing idea and making it better. Because of Apple's visionary boss Steve Jobs the company has been able to perfect three technologies: the laptop, the digital music player, and the smart phone. These perfected innovations have expanded multiple markets, areas of commercial activity where goods and services are bought and sold (definition from Google), including the telecoms and music industries. Telecoms are industries and companies providing data, phone service or entertainment to consumers and businesses (definition from Google). This new tablet is promising to transform the telecoms, computing and media industries. Computing is the branch of engineering science that studies-with the aid of computers-computable processes and structures (definition from Google). This new device is hoping to increase the number of digital readers of newspapers, books, and magazines. The question is whether this product will be able to save crashing media industries.

Why are newspapers and magazines struggling? This comes into play during the mid-1990s when the Internet began to expand in use and popularity. People no longer need to buy a newspaper or magazine to gain access to the information provided in the item. These people can instead go onto the Internet and find the same information. This internet revolution has caused for many newspaper companies to go out of printing business. Many owners of newspapers such as the LA Times have had to sell most of their share of the business. 

How can this new iPad help these businesses? Can it? These tablets are expensive and it may take a while for the product to spread and this could negatively affect the enthusiasm for a comeback of struggling media industries. These tablets may not appeal to all newspaper and magazine readers and could prohibit the magazine and newspaper companies from ceasing to use the printing presses. This could become expensive forcing more newspaper and magazine companies to go out of business. The possible positive effect of the iPad and the switch from paper to digital magazines and newspapers is a less demand for paper which would help save our natural resources. Because of this innovation, the iPad, some industries may die while others are born and grow.