Part of the Solution

This is going to become an increasingly more significant problem which is amazing when the national consensus seems to be that it is already a problem. Health care costs will compound the effects of this recession. If this problem is not addressed, then we are already aware of the next large bubble that will blow in a few years.

COBRA takes a Big Bite out of Unemployment Pay

The Continuing Tilt towards Socialism?

Here are some very good thoughts on how the government should handle the insolvent banks that we have thus far "bailed-out." What he is saying here is principled, by the book, capitalism in that he is using the system, by its definition, to advocate a much more socialistic solution to the credit crisis. It is pretty brilliant to be honest. The problem is politics. If we can't get a single Republican Representative and only three Republican Senators to vote for the stimulus package, the chances are slim that something like this would pass. Here is a point where politics impedes economics.

Why We're Not Socialists.

The Politics of Economics

Are politics ruining economics? Interesting idea, especially when there are a lot of congressmen who don't understand the full scope of the stimulus package but are toying with it for political posturing.

Of course though, some would argue that economics ruined itself long before.

Politics is damaging the credibility of economics

By the way, I usually like what Krugman has to say.

Gender in the Office

This economic downturn is changing the look of the American workforce.

Gender and Job Losses.

Stimulus and Recession

So this article details the new plan to have banks try to sell their troubled assets. This is something that should have happened back in the fall. These assets are the source of the problem and usually when you want to fix something, you go to the source. When Japan faced a similar crisis in the 1990's and then had a stagnated and deflated economy for a decade, they did not attempt to take the assets off of the company's books and it was later determined to be one of the causes for the prolonging of the problem.

If the assets are not taken off of the books (I would say that most, if not all, of the mortgages should be refinanced. I know it is a significant and broad step but then again so is $900 Billion) then it will just prolong the recession and perpetuate the downward cycle as more people lose jobs, more people will be foreclosed upon, and the cycle will continue.

If you get the assets off of the books, the companies will be more liquid (and in theory) should begin to lend again. Since the lending didn't occur the last time it was proposed in theory, this banks should be federally mandated to begin lending again. It does not have to be an outrageous sum but enough to spur on some growth and so that the only tool fighting the recession is not just the government's fiscal spending.

That is problem with this proposal. As pointed out in the article, there are no mandatory regulations that will be put in place requiring institutions to lend. An error in my opinion. Hopefully, Geithner isn't taking advice from Paulson.

On another note, all of you Michiganders out there might recognize former Governor John Engler in the article's accompanying picture.

Plan to Help Banks Sell Bad Assets.

This article is from Naomi Klein and it discusses how other countries' citizens have reacted to the credit crisis.

All of Them Must Go.

Charity is Only Part of the Solution

A company with a business model focused on developing products for those with a true need, not just a want. The world's population in extreme poverty has long been under-served by business.

A Company Prospers by Saving Poor People's Lives.

Putting a Face on the Economy

As Joseph Stalin once said, "One death is a tragedy; a million is a statistic."

Let's not get lost in the numbers.

Don't Let Numbers Numb You.

Reclaiming a Business Education

As I near the end of my MBA program, I can say that I have learned much, not from the actual coursework but mostly from my fellow classmates. These classmates have offered me a glimpse into their experiences and attitudes and how these have shaped their understanding of the world. I believe that I can claim that much of what I have learned is more of an example of what to avoid both in action and thought.

It is not much of a surprise but these business students, more often than not, fit the mold of the stereotypical business student. They focus on the financial bottom line and do not seem to examine the consequences of their choices. I feel like one of the most pivotal tools that I have ever been taught is always to critique what I am taught. Not necessarily to analyze each piece to death but rather to not merely accept everything as truth. I don't see my fellow business student viewing their education through the same critical eye. This has been and continues to be disheartening.

In light of recent events, I feel as though it is time to start educating business students to focus on actively seeking to improve the lives of others rather than just not causing harm, whatever that may mean. This is a focus on what is their "self-interest," a basic piece of justification for the capitalistic system. It should be taught that "self-interest" isn't just what is good for the person but also the group as a whole. That if the whole is improved, this will, more likely than not, improve everyone's situation and not leave the margin behind. Some may say this sounds socialistic. It could be but it is not exclusive to that system. It is about understanding the consequences of choices. It is an understanding of "I am because we are."

An easy example of this is the fact that currently one of the biggest concerns facing the United States is the state of the health care industry. The country has a huge number of uninsured who have helped lead to the astronomical rise in health care costs. In our current climate, more and more people are being laid-off and, as a result, are losing their health care packages, if their employer provided them with this insurance. So the numbers of people who are uninsured are rising, just magnifying the need to address the health care problem. If we want to help save the economy, a great way to do it would be through universal health care. This would eliminate much stress on families with huge piles of bills that they cannot pay and also provide an economic boost from the government. It would have a significant effect on the future of this country.

Many do not believe that it is in their "self-interest" to have universal health care. Many years ago, many thought it was a bad decision to have a social security system but now, everyone would be up in arms if social security was discontinued, even if they don't "need" it.

With that being said, here is an article that inspired this post.

From a Jesuit publication, America:

What's Good for Business?

Some More Economic Stimulus Articles to Bore You

Here are a couple of articles about Obama's proposed stimulus package that offer a critical eye.

Economic Stimulus or Simply More Misguided Spending?

A Stimulus with Merit, and Misses Too.

Then finally, this last article is about non-profits and how they will be affected by the recession. A sad sight to see as those who are the most vulnerable will more than likely be or already are the hardest hit by the recession. Unfortunately, organizations whose focus it is to address the needs of this set of people are also struggling and many may have to close. All this does is just compound the effects on the marginalized.

Credit Crisis is Leaving Charities Low on Cash.

Economic History 101

Here is a good link to see recent recessions and the policies implemented to control the problems. It might offer a little more perspective on our current recession.

How the Government Dealt with Past Recessions.

What This All Means

It looks like the idea of banking is and should return to more of a traditional approach, one that is practiced by the banks in the industry that have been the most successful through this whole turmoil, community banks. I know that it won't be a complete transition but it is for the best. Thoughts?

Fair Game.

Also, here is an initiative to save the rain forest. Thoughts?

For Peruvians, Baskets for the U.S. Market Bring a New Way of Life

Money Hole

In The Know: Should The Government Stop Dumping Money Into A Giant Hole?

Courtesy of Matt Japinga

Now We are Thinking

Is it any wonder that the most prosperous time in America's recent economic history was the 1950s when there was a huge focus on economic egalitarianism? If we want to rise out of this recession, we need to focus on those who are hardest hit.

Stimulus Plans that Help the Poor.

The Case for Small-Government Egalitarianism.

Looking for Business

An interesting idea by Hyundai. There are strings attached of course. The companies that will last through this purging are the ones that will have the most imagination and innovation in terms of offering services to customers.

Hyundai Offers Car Assurance Deal.

Have a Happy, Happy, Happy, Happy Hanukkah!

Competing religions. American consumerism. Christmas vs. Hanukkah.

Are you ready to rumble?

The Invisible Hand of God.

Development as Freedom

Profitability and justice are not mutually exclusive.


A Small Bank Juggles Its Roles.

Revolution in Economic Thinking?

Here is a little summary of where the study of economics has been and will be going. I think the article misses a few points of why we are in this mess but nonetheless it is worth a read.

Paradigm Lost

A Few Articles

Here are a few articles for your enjoyment today.

The Age of Mass Intelligence.

Pop Psychology.

Most Likely to Succeed.

Unemployment in the US

So the news that the US lost 533,000 jobs in November is obviously significant news but it doesn't tell the whole story.

Unemployment is defined as, "an economic condition marked by the fact that individuals actively seeking jobs remain unhired. Unemployment is expressed as a percentage of the total available labor force. The level of unemployment varies with economic conditions and other circumstances."

The key to this definition is the labor force, which is defined as, "the labor force of a country (or other geographic entity) consists of everyone of working age and below retirement age who are participating workers, that is people actively employed or looking for work. Child labor laws in the United States forbid employing people under 18 in hazardous jobs."

So what is the real number of people who are unemployed?

Read this.

Smart, Very Smart

This is a good essay but it is pretty technical with lots of background reading. It is definitely worth the read if you have the time.

The Greatness of Keynes...