Tag: Economics

Deflating the Fed?

by Chanel Rose, posted in Business Ethics, Current Events, Economics, General, My 2 Cents and Sadly No Coffee

The Fed Is Swimming Dangerously In Uncharted Waters by Scott Minerd

Many people from all walks of life are terrified about what is happening at The Federal Reserve. The Fed’s balance sheet has dramatically increased over the last several years. The reason this has happened was because we have learned our lesson from the Great Depression — do nothing and things will get MUCH worse.

The author is right these are uncharted waters. Janet Yellen and the other central bank leaders have to be cautious about shrinking their respective balance sheets. The problem is that we don’t  have an example to go by. With the Great Depression we learned that an influx of capital can help stabilize the economy – even if just a little. We have not seen either a successful or unsuccessful reduction of capital. Therefore, all the concern is warranted.

With that in mind, you can’t live in fear. We might now have the direct experience to learn from, but we still have other lessons. Such as, care for the masses. Now granted our politicians don’t really do that for the most part, but … luckily not all of our officials are politicians. Keep that in mind. Some of our leaders do actually care and have morals.

Shutting Down the IRS?

by Chanel Rose, posted in Current Events, Economics, General, My 2 Cents and Sadly No Coffee

Members Of Congress Push To Shut Down IRS Forever by Kelly Phillips Erb

This is one of the most ridiculous ideas Congress has ever had. This and ever other attempt to pass the blame to someone else. House Speaker Paul Ryan’s ideas are not much better. Repealing several bills, acts, etc. that benefit MANY Americans is not the answer either. How about they reinstate The Glass-Steagall Act? Or, maybe properly fund our many different departments and agencies? After all, government spending is one of the biggest (if not the largest)  money multipliers. Then again, reducing the tax code to less than 10 million words might help as well, but that is the duty of Congress.

What Supply and Demand Does NOT Address

by Chanel Rose, posted in Economics

“Supply and demand” is a common response to many economic discussions. However, it is only PART of the discussion. There are MANY MANY MANY factors at play. NOT JUST supply and demand.

Last night I had a great (though short) discussion  with a peer about political candidates and the economy. One of the topics (BRIEFLY) discussed was the unemployment/underemployment of college graduates. His solution was to reduce the number of college graduates because … you guessed it … supply and demand.

He is right. If we reduced the number of college graduates available for businesses to hire, businesses will have to offer the graduates available more. Yet, something nags at me. Something is screaming at me that this is a bad idea. Part of my peer’s argument was that if we continue to increase the number of college graduates, they will continue to get less and less because the supply would be greater than the demand. Thus, we should NOT make college more affordable and accessible for the masses.

Yet, something nags at me. Something is screaming at me that this is a bad idea. That something is all other causes and effects. Yes, one of the effects of having a large college educated population is reduced “reward” for that education. Yet, there is more to it.

Do you know what else is a result of having a large educated (college or otherwise) population? All the benefits of education. You have people making a better contribution to society and making it a better place. You have people making gadgets and gizmos. You have people increase the efficiency of operations. You have people using personal, group, or public resources to improve the environment. You have a happier society.

Increasing the education of the population may reduce the individual rewards, but it also increases the societal rewards. I recall hearing a comparison of today’s economy with yesteryear’s. The comparison goes something like the rich of yesteryear would be the poor of today.

That comparison reminds me of this discussion. A college education may not grant the same social-economic advantage as it did in yesteryear, but today’s society-economy is more advanced than yesteryear. Thus, progress and stuff.

In conclusion, supply and demand is not the entire answer. It is only part of the answer. What are other parts can you think of?

My imperative – my command – is to ….

by Chanel Rose, posted in About Me, Women's Issues

My imperative – my command – is to work directly with individuals to help them overcome societal barriers by helping them find answers and increase their knowledge.

I seek to impact individuals or groups of individuals.

I am driven to ensure everyone has access to opportunity.

I uncover new information and develop insights.

It breaks my heart to know people go hungry. It breaks my heart to know that people sleep without shelter. It breaks my heart to know that people go without health care. What breaks my heart more is to hear people say that those people deserve it. No one deserves to be hungry. No one deserves to not have shelter. No one deserves to go without treatment. No one. Not the “good” people. Not the “bad” people. Not adults. Not children. No one deserves to be in poverty.

In the not too distant future no one will go hungry. No one will be without shelter. No one will be without healthcare. This is an idealized view of the near future. Some may say that this is unrealistic and unachievable. However, nothing is impossible if we work together to build the perfect society. What matters is not that we achieve this within our lifetime, but that we continuously work toward it.

Highways, Banks, & Congress

by Chanel Rose, posted in Business Ethics, Current Events, Economics, My 2 Cents and Sadly No Coffee

Congress to Eliminate Billions in Wall Street Subsidies to Fund Repair of Nation’s Highways by C Robert Gibson a Contributor of US Uncut

Lawmakers Weigh Cut in Fed Payout to Banks by Ryan Tracy a Reporter for The Wall Street Journal

A US Uncut article popped up on my Facebook discussing Congress possibly defunding banks to pay for the repair of US highways. This tickled my suspicious nerves. Of course, I had to look deeper into it. Then I found The Wall Street Journal’s article. This could actually be a thing.

Here is the problem with cutting the Fed dividend rate from 6% to 1.5%: Banks are counting on that 3.5% difference when creating short term (yearly) and long term budgets. So Janet Yellen is right, this does have unforeseen consequences. For many of them, Congress members are just diverting their eyes away. Some of the bigger banks could make up for the difference by not paying their execs HUGE bonuses, but not only will that not happen, the smaller banks don’t have that leeway.

I have mixed feelings about this. On one hand I am all for requiring the rich to help keep this country great — or make it great again — by financing infrastructure directly and indirectly. On the other hand, a 3.5% drop in expected revenue/income/etc is a BIG drop to makeup.

As stated previously, the “big” banks have areas they could cut that would not affect their customers, clients, or the “average” American. These include: not remodeling the million dollar exec offices, lowering exec bonus, reducing “marketing” budgets for their largest clients (businesses spend money winning and dinning their clients, especially their big client. It is reasonable to assume banks do too), and much more. However, we can all assume that these reasonable adjustments will not be implemented. Instead, overage charges will increase, and loan terms will become less favorable and the “perks” will be reduced for the smaller clients.

Banks will react to this, they can’t not react. In the end, someone is going to be hurt, and I doubt it will be the wealthy.

Companies verses Countries: The Topic of Syrian Refugees

by Chanel Rose, posted in Business Ethics, Current Events, My 2 Cents and Sadly No Coffee

Do Companies have an Obligation to Help Syrian Refugees?

Whether companies have the obligation to help Syrian Refugees or not, they are helping. Some even want to help more, but … governments are standing in their way.

Companies are donating MILLIONS of dollars to help organizations provide for the refugees, such as shelter, food, medication, and education. Many companies have even open up internships and job training programs, but they are hesitant to put more resources into providing such opportunities for the refugees because …. countries across the world are clarifying their legal status. By not clarifying the refugee’s legal status, the governments are cause ambiguity towards whether they have the right to work or not and making it unclear whether or not they will be deported.

This makes companies hesitant to put resources towards job training and internships for them because at any moment – near or far – the refugees could be sent off. This wastes the company’s efforts towards job creation.

World leaders, I call on you to do your part in ensuring the wellbeing of those fleeing Syria.

Leading Employers: Local vs National

by Chanel Rose, posted in Business Ethics, Economics, My 2 Cents and Sadly No Coffee, Personal Finance

A few decades ago, GM was the largest employer in America — so I have been told and I am lazy and don’t want to look it up.
Today, Walmart is the largest employer in America — so I have been told and I am lazy and don’t want to look it up.

The problem that people propose is that when GM was the largest employer, people were paid well on average and the their was a large middle class. Since Walmart does not pay well on average, it is one of the causes of the decline in purchasing power of the middle class — among other issues.

My thought is this…. America is HUGE. Like super huge. Though I agree with the premise of this argument, there are additional factors at play. Yes, having a low wage employer dominate the job market does affect the quality of the middle class. That is on the macroeconomic scale. There is also the microeconomic scale.

You may or may not be aware that there are several magazines (FORBES being one of them) that publish on occasion Best/Worst Cities in America for Business/Middle Class/Whatever.

A single company is the leading employer in a nation because it has multiple locations. As the leading employer, its average wages does affect the national economy; however, that company is not necessarily the leading employer on a local level.

On a local scale, a manufacturer, bank, or other higher paying company may be the leading employer. Those companies have far fewer locations thus have far fewer employees than the nationally leading employer. This local leading employers have a greater impact on the economy.

During our fight reduce income inequality, we must identify our local leading employers and insure their feet are held to the fire too. This does not take from the social responsibilities for a company like Walmart.

Who is the leading employer in your area? What is their average wage?