Pressure from default of European countries

From class, we learned the bank panic was one of the factors that led to Great Depression along with Stock Market Crash. Similar to what happened in the world today, as the European countries has high risk of default, people start to panic. Business reduced investment, people are worried about the effect of them defaulting to the world, consumption decreased and etc. Luckily, we do not have gold standard anymore to bring us into worse situation. The European countries had also came up with a lot of reform and proposals to stimulate the economy and reduce the debt to prevent the risk of default.

Occupy Wall Street

US has continuously suffered from income inequality. As the economy boomed, the demand of high skilled workers (particularly in financial and technology sector) has been increasing which led to the high price of skills. and thus, higher income inequality.

http://www.forbes.com/sites/afontevecchia/2011/11/17/occupy-wall-street-income-inequality-and-the-burden-of-action/

Hong Kong Income Inequality

The income inequality in Hong Kong has been more and more serious as the income growth for rich people outweighed the poor. By using the overall Gini coefficient as measurement, we can see that it is the highest since the figures were recorded. 30 years ago, Hong Kong experienced high income mobility as the manufacturing industry prospered. Many people who moved from category 1 to 5 were not due to high education background. However, Hong Kong has transited to financial sector which high education background is needed to succeed.

The wealth gap between the rich and poor has widened further with the overall Gini coefficient, representing income disparity, at its highest since the figures were recorded.

Citi Plans to Layoff Thousands

In a recent article by CNNMoney, Citigroup will lay off 4,500 employees over the next few quarters. The current unemployment rate in the U.S. is 8.6%, which is better than the recent market trend but is still higher than the history average of 6%. Hopefully this will not decrease it any further and cause a slowing of our economy, as consumption will also decrease.

Great merger Movement

AT&T and t-mobile merger was not allowed by government because government thought that if these two large company comes together than they can control the whole cell-phone market and limit the price so that no other company can come in or make profit. This merger was similar to the great merger movement (1895-1905).

Big Issue Over Student's Hanging of Confederate Flag

In an article by CNN, a college student at the University of South Carolina Beaufort named Byron Thomas hung a Confederate flag in his dorm. After numerous complaints from those passing by the commons, he was asked to take the flag down. Thomas, a black student, asserts that the flag stands for something other than division and racism. He believes it was given this negative stigma from groups like the KKK. The fact that this story is being aired exhibits the lasting sentiments from the slave era.

US unemployment has decreased to 8.6% but, it is still above the national historic average of 6% (Sobhana Chandra). This might be caused by hiring led by large retail store especially for November-December holiday shopping.

Employed Women Dropping out of the Labor Force

In the latest jobs report coverage, it has been found that the unemployment rate has fallen in November because a large number of people, primarily women, have dropped out of the labor force. What is more peculiar is that a substantial portion of these women had jobs in October, alluding to reasons such as maternity leave or other reasons.

http://economix.blogs.nytimes.com/2011/12/06/employed-women-dropping-out-of-the-labor-force/

CNN Hero Feeds Hungry for Seven Years Straight

A CNN video of Jorge Munoz, a bus driver and family man in the city of New York, really touched upon the concept of income inequality and the social welfare system in the U.S. As we have seen, the social safety net has typically been smaller than that of Europe because of "reciprocal altruism" for one. As Americans, we believe that the poor are lazy, so we are more resistant to welfare programs. However, Jorge Munoz shows that there are people who are not judgmental but instead offer their assistance to the poor and homeless. Those like Jorge add a cushion for the poor while the 90/10 wage gap decreases.

California Creek name to stay the same despite cultural insensitivity claim

Officials decided Tuesday not to change the name of Negro Creek, located in Nevada County, California despite cultural insensitivity claims by the NAACP. After already being changed once last summer from the pejorative "N-word" to Negro, officials dictated that Negro is only an objective term used today. Leon Jenkins of the NAACP complained saying, "If you are willing to change it to negro, how much of a push would it take to change it to black? How much harder would that have been?"

http://www.sacbee.com/2011/12/06/4103968/negro-creek-will-remain-in-calif.html

Economic Inequality

According to President Obama the inequality in US has increased a lot and has not been so high at great depression (http://politicalticker.blogs.cnn.com/2011/12/06/obama-compares-current-economy-to-great-depression/?hpt=hp_t1). This ties to what Kuznets curve shows i.e. with the increase in level of development the measure of inequality also increases.

Obama compares current economic inequality to Great Depression

According to the President, the United States has reached a level of economic inequality that has not been seen since the early 1930s during the Great Depression. The middle class continues to suffer as the top 1% continues to enjoy great success. And yet, Obama stated that Republicans would still have us stick to the same policies that stack against middle-class Americans, adopting an "every man for himself" mentality.

http://politicalticker.blogs.cnn.com/2011/12/06/obama-compares-current-economy-to-great-depression/?hpt=hp_t1

Report documents dramatic shift in immigrant workforce’s skill level

Recently, the US immigration rate of skilled labor is higher than that of unskilled one. The increase shifts out labour supply curve. Among those skilled immigrants, they have a high educational attainment because 30% of them have at least a bachelor’ degree. It shows that the immigration is positively selected. Also, we can see that the trend of labor demand is changing because we have transformed from manufacturing industry to a technological industry. We then need more skilled workers to complement the technological transfer.  Besides, it is interesting to note that immigrants from Mexico and Central America seem to be low-skilled while immigrants from Asia tend to be high-skilled.

http://www.mariowire.com/2011/06/10/report-documents-shift-immigrant-workforce-skill-level/

Main Causes of the Great Depression

In our lecture, we learned that the causes of the Great Depression are mainly due stock market crash and bank panic. During October 1929, the market stock price started to fall, which decreased the wealth of investors. Also, the fall in price level increased the real value of the debt obligation of people who had mortgage. People also worried about their unemployment, so they would then decrease their consumption. For bank panic, in October 1930, a series of banks failed caused people to withdraw from banks. This act decreased money supply in the market and caused interest rate to increase. GPD then would decrease as well.

http://www.gusmorino.com/pag3/greatdepression/index.html

Population profile of the United States

The National Population Projections suggests that the US population growth is large in terms of number but the growth rate is actually slow in the future. Since people’s life expectancy is increasing, we assume that in the average population age will increase too. What contribute to its slow rate then? It is because the fertility rate of women cannot catch up the large increase in mortality rate in the future. Also, the population race is more diverse, especially Hispanic origin. It may takes up the major element in population growth.  It is surprising that non-Hispanic Whites will experience the slowest growth rate among other races.

http://www.census.gov/population/www/pop-profile/natproj.html

From the San Diego Chargers to the Los Angeles Chargers?

There have been recent rumors (back in August-September) that the San Diego chargers could be moving from San Diego sometime soon. One of its prospective new cities is the city of Los Angeles. If a new football stadium is built in L.A., then the Chargers might go through with the move, considering that their current stadium, Qualcomm Stadium, is considered outdated. A move to Los Angeles “would increase the team’s value by at least $200 million”. This increase in value will be a result of the new stadium, and more sponsorship opportunities only available in L.A. This potential move is interesting because there was a point in time where people thought San Diego would be the rival of San Francisco in Southern California. Instead of San Diego, that rival turned out to be L.A. And it would be another slap in the face of San Diego if they lose their professional team to Los Angeles.

http://articles.latimes.com/2011/sep/07/sports/la-sp-san-diego-chargers-20110908

FIFA Financial Fair Play: Will it promote convergence?

FIFA’s Financial Fair Play Regulations will, in effect, combat “income inequality” among football (soccer) teams in Europe. Basically, in order to compete in leagues in Europe such as the UEFA Champions League, teams must fulfill a break even requirement – that is, they cannot spend more money in transfers and/or wages than they generate over a certain period. This will prevent football clubs like Manchester City (owned by Mansour bin Zayed bin Sultan Al Nahyan, whose riches mainly come from the oil industry) from using Nahyan’s income from oil to outbid anyone because their revenues come from a source outside football (or in some cases in the past, clubs would take out loans that they have no means to pay). Theoretically, this will give clubs a level playing field because they will only be able to spend as much as they make in football. But, almost ironicallt, the clubs who earn the most football income are still the most popular clubs who have the most famous players and who play in the most advanced stadiums. So I believe the Financial Fair Play Regulations will curb SOME spending, but it won’t completely promote convergence, because the rich clubs will keep on being rich, while the minnows will find it hard to earn as much in terms of football revenue.

The NBA Lockout: battle of the 1%

The NBA lockout already ended a couple of weeks ago, but even as an avid basketball fan, I was so apathetic about the whole thing. It was owners vs players, billionaires vs millionaires. The sense of entitlement of these two camps was sickening; they are all part of the top 1% in terms of income (and the mean of basketball players’ income is highest among athletes), yet for months, they could not agree to a Collective Bargaining Agreement. And this was all happening during a time when income inequality was a genuine concern of the public. To see millionaires squabbling over who gets more was disappointing, when a normal American won’t even be able to earn a million in their lifetime.

http://denver.sbnation.com/denver-nuggets/2011/11/26/2587870/nba-lockout-news-agreement-details-free-agency-salary-cap

Taxing the Rich

One of the biggest debates in Washington today is whether the tax rates for the rich should be increased to help fund our budget deficit. This is not just a federal government issue, but also a local issue that affects everyone. This discussion goes back to our lecture about income inequality and how one would expect most people would prefer to tax the rich so that the rest of the people benefit. It is clear that in New York, people prefer the most obvious choice of taxing the rich and lowering middle-class rates. This is the logical solution that we came to in class, but we also discussed other reasons why Americans might not want to adopt such a tax scheme. These reasons included higher income mobility (possibly a myth in the US), negative views towards the poor, and racial heterogeneity. In a state like NY, it's easy to see how the legislature may be able to tackle some of these reasons on a smaller-scale, but on the national level, there may be too many differences among voters to come to a consensus on this type of tax legislation.

http://www.nytimes.com/2011/12/07/nyregion/cuomo-and-legislative-leaders-agree-on-tax-deal.html

Democracy on the Retreat?

With levels of economic uncertainty rising in the European Union, some are predicting that democracy is being threatened by the realities of the world economic crisis. More and more we are seeing private interests lead the way in deciding political issues. One particular example is the S&P downgrading the US credit rating and threatening to do so for 15 EU entities. This sort of power is held privately by companies like the S&P, when it should be in the hands of the people, through their elected leaders. We touched on a lot of these issues in class, particularly the rising economic inequality, but we hadn't extended them to discussing basic democratic rights as a whole. Have we given up our democratic rights by allowing past leaders to put us in such dire straits that current leaders must step outside of their legal bounds to maintain the status quo?

http://www.washingtonpost.com/opinions/democracy-is-on-the-retreat-in-europe/2011/12/06/gIQA2CvpaO_story.html