Archive forOctober, 2012

The Grass is Always Greener In China…. Or So It Seems

http://www.wbur.org/npr/163658514/as-economy-slows-china-looks-for-a-new-model

 

This article juxtaposes how the Western world views China as an ever-growing world power, and how economists see it as a nation struggling to adapt to new economic demands.  The interesting thing with this article is that it highlights many aspects of “growing pains” that America and other industrialized nations went through many decades ago.  Issues with infrastructure, labor movement, rising labor costs, and government corruption plague the nation, bringing China to “a crossroads,” in the words of an economist working at the China Europe International Business School in Beijing.  This insight into China’s greater economic plan, as well as the incoming economic struggle they will face, is interesting when one takes into account the role of externalities, price discrimination, and taxes, all which have influenced China’s success both in positive and negative ways over the past several decades.

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Is Apple becoming the Microsoft of mobile?

http://www.cnn.com/2010/TECH/05/05/wired.apple.microsoft/index.html

 

After Apple issued a policy that Apple would only allow the iPhone OS apps which were required to be written in Apple-approved programming language. This claim from Apple obviously asserted that Apple had embarked on the journey to monopoly of this same kind of communication services. The rule effectively prevented other competing platforms including Android, Windows Mobile, and Palm’s Web OS to convert the apps that was written in a third-party code or program language, which made them impossible to compete with Apple. To link this news to our class topic, I would say that Apples’s new policy is a form of restriction that forbids other competitors to share the resource to create the apps, which yield a large amount of profit share to the OS apps service platforms. By monopolizing and controlling the resources to create the apps, Apple is clearly becoming a huge monopoly that dominate the OS apps service industry.

 

Francis, Zixian Lin

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Economic Impact of Hurricane Sandy

http://www.dailyfinance.com/2012/10/30/economic-impact-from-hurricane-sandy-wont-derail-economy/

 

Here is a link that discusses the impact that Hurricane Sandy will have on the economy. It goes on to explain that it will effect transportation companies, mainly speaking of aircraft carriers. Over the past few days over 14,000 flights have been cancelled. Many companies are losing money due to this and the need to rearanged crews and remburse ticket costs and satisfy the needs of customers. The article also goes on to explain how retailers will be loosing billions due to the damage there stores may have experienced and the lack of sales and ability to import and export goods.

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Auto companies hit back against Romney ads

http://politicalticker.blogs.cnn.com/2012/10/30/auto-companies-hit-back-against-romney-ads/?hpt=hp_t2

This article discusses the auto industry’s response to Mitt Romney’s political ad, which claims that GM plans to double the number of cars built in China and that Chrysler plans to start making Jeeps in the same country. The ad, which claims “Obama took GM and Chrysler into bankruptcy and sold Chrysler to Italians who are going to build Jeeps in China,” is just another attempt by Romney and his campaign to mislead voters. It is incredibly disheartening to see ads like these, ads that are designed to misinform, because it gives a false sense of the true state of not only the auto industry, but the economy in general. Republicans would like everyone to believe that our economy is currently is a state of dismay, and there is no recovery in the foreseeable future. However, when you look deeper at the facts, you will see that our country is on the steady road to recovery. Don’t let Mitt Romney and his cronies lead us to a dead end.

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America’s Recovery

http://www.economist.com/blogs/freeexchange/2012/10/americas-recovery

This article discusses U.S.’s economic growth with the Bureau of Economic Analysis recent announcement of the annual pace of different countries. While the U.S. is still in recovery, there is still economic growth compared to the second quarter at 1.3% and this third quarter at 2%. The U.S. is still doing better than Europe, where countries still remain in recession. The article continues to discuss concerns about the global economy and suggestions of how local government should make cuts and be a “small positive contributor to growth rather than the significant drag.” I thought this article was an interesting reaction to the rate of economic progress.

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Economic Impact of Sandy

This is a New York Times article discussing the economic effects Hurricane Sandy will have on New York city and the rest of the east coast. It takes into account costs of expected damages and brings up the phenomenon that rebuilding after natural disasters like this often lead to a boost in economic growth.

http://www.nytimes.com/2012/10/30/business/brunt-of-business-impact-yet-to-come.html?ref=business&_r=0

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One Reason Big Business Cares About the Deficit

http://blogs.wsj.com/corporate-intelligence/2012/10/25/heres-one-reason-big-business-cares-about-the-deficit/
A coalition of more than 100 big company CEOs have signed onto the “Campaign to Fix the Debt”. The CEO’s represented companies from many different sectors of bushiness with different political interests and presidential candidates that they fund. The companies may have their differences but they all agree on one thing: the U.S. business tax code needs to change. The tax allows for the government to tax corporate profits at a top rate of 35 percent to domestic and overseas profits.  Not every corporation pays this high tax but the income brought in to the government by the tax accounts for 10 percent of the total federal revenues. The mission of the “Fix the Debt” coalition is to have the total levy on corporations to remain flat even if a revamped business tax regime means certain companies will pay more than they use to with the current text and some will pay less. According to the CEO’s, the deficit will not decrease without an increase in total tax revenues.

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Graduate School: Is it worth it?

This article discusses the pros and cons of attending graduate school. Many college graduates move on to graduate school after finishing undergraduate programs. In today’s economy, many jobs require more than just an undergraduate degree but this of course increases the debt that comes with attempting to get a better paying job. What I found to be interesting about this article is the change over time of education levels. A few years in the past, a graduate degree was not necessary for too many jobs but in some ways, graduate school is becoming the new “college.” Many people plan on attending it after college, myself included, but this article advises many to think about the decision before they make it. For me, this article really made me think about my choice. Of course, I still have a few years to think about this in more depth and to see what my options are when I get there, however,  as the article stated, many students after graduating from graduate school do not even get a high paying job that will put a dent into the debts that they have accrued from their education. The “social norms” for education have in some ways changed.

http://www.washingtonpost.com/business/grad-school-a-leg-up–in-debt/2012/10/26/a7a08860-1bed-11e2-ba31-3083ca97c314_story.html

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The Big New Push to Export America’s Gas Bounty

This is an interesting New York Times article about Excelerate Energy, an American natural gas company, that is hoping to create a large export terminal and contribute to the United State’s entrance into the global market as a seller of natural gas. This article discusses several key concepts that we have discussed in class including the basic ideals of supply and demand as well as how price can be deceptive when externalities are not factored in.

The United States is able to extract natural gas from the ground via fracking at a reasonably  “low” cost (without factoring in the multitude of external costs such as water contamination, health issues, increased traffic and other such impacts on local regions). The U.S. would then be able to sell this natural gas on the global market, where the price is extremely high due to huge global demand and gas shortage. As the stated in the article “The wide price disparity between American and global markets has energy giants like Exxon Mobil and BP eager to sell cheap American natural gas to foreign buyers to cash in on robust global demand.” It appears to me that these externalities are not being factored in by American energy companies. Would the United States still be able to make such a huge profit on selling this “cheap” natural gas to the global market if they took externalities and social cost of this gas extraction into account? Do the external costs outweigh the potential benefits of becoming an international exporter of natural gas?

http://www.nytimes.com/2012/10/24/business/energy-environment/excelerate-energy-aims-to-be-a-leader-in-natural-gas.html?_r=1&ref=businessspecial2

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Iran’s Empty Threat

Iran is threatening that, if antinuclear sanctions are strengthened, it will cease all oil exports to the West.

However, this is unlikely to have any significant affect on price, as Iran is already exporting its lowest levels of oil in 25 years. Current sanctions have already limited Iran’s ability to export oil, meaning they are making an empty threat. Clearly, with Iran’s economy already hurting from sanctions and more on the way, Iran is trying to play an empty hand in an attempt to alleviate their difficult situation.

Click for link

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