economy – Anna's Alcove

Tag: economy

Campus Pinpoints Details in Occupy

Students from Edinboro University and Mercyhurst College discussed the humane conservative viewpoint of the Occupy Wall Street Movement with Dr. Michael Federici, from the political science department at Mercyhurst, during a panel discussion in the R. Benjamin Wiley Arts & Sciences Center on April 5.

“The problem when we’re general (in our discussions) is we miss the subtleties that allow us to see similarities between things that are seemingly different,” said Federici in his opening comments.

Federici said that humane conservatives tend to take the word “conservative” seriously, in that they believe there is something worth preserving and conserving.

For example, the integrity of the community is important to conservatives and in relation to the Occupy Wall Street Movement, there are several areas of common ground that Federici pointed out.

Concentrated economic power is seen as destructive to local communities, Federici said.

“I’ve seen over the course of decades, small family-run businesses be replaced and forced out by big, giant corporations,” said Federici. “We would call that the ‘Wal-Mart Problem.’”

The Occupy Wall Street Movement claims that they are fighting against the combined power of major banks and multi-national corporations and their influence over politics, Federici said.

Yet, Federici said he doesn’t agree with the way that the Occupy Wall Street Movement demonizes the tens of thousands of people that work there.

“That is precisely the kind of language that I think polarizes politics and discourse,” Federici said.

The idea that it’s possible to transform the entire world is another example of language use that Federici doesn’t agree with. “The very talk of massive, wide-sweeping change is unrealistic and likely to do more harm than good,” he said.

“I think it makes more sense to focus on smaller, local goals that are attainable and to stay within your own community, first and foremost, when it comes to political reform,” Federici stated.

Federici also didn’t agree with the idea that more democracy is better. When we talk about rights and democracy, Federici said, I think you’ve lost touch with how the real world operates

“Political action requires a certain degree of intelligence. Not only intellectual intelligence, but practical intelligence that comes with time and maturity,” said Federici.

In response to Federici’s comments, Sean Fedorko, a recent graduate from Mercyhurst who holds B.A.’s in both Political Science and Philosophy, said that he agrees with what Federici said.

The Occupy Wall Street Movement wants localization and empowerment, Fedorko said.

So, thinking about empowerment in relation to self-interest, Fedorko said, “this is the kernel that really rests in the similarities between humane-conservatism and OWS and maybe (can show) how… these two groups are advocating a very similar goal from very different means.”

The people involved with the movement are advocating a way to regain power because they see an imbalance of power, said Fedorko.

“They seem to be failing, however, due to their knee-jerk reaction to political, economic and social institutions that are failing to foster the good life for the majority: the 99 percent,” Fedorko pointed out.

I think that if the activists were to articulate that what they’re advocating isn’t to seize control of Wall Street and punish them, said Fedorko, but trying to reintegrate Wall Street “as individuals who have sort of lost the way to a community that we all need to foster.”

Brian Barton, a senior majoring in Political Science at Edinboro University, responded next by saying that one of the unifying characteristics of humane conservatism and the movement is the skepticism toward the government.

The problem that conservatives had with the bailouts in 2009 was the government interference in the market, Barton said. They felt that the government was deciding who would be the winner and the losers rather than just allowing the marketplace to decide.

The government intrusion in the marketplace has extended our current economic drought, said Barton, and that’s why I find myself supporting some of what the movement is advocating.

Suzanne Boone, an undergraduate majoring in sociology at Edinboro University, has had a personal experience with the Occupy Wall Street Movement and, in her response to Federici; she said that it’s important to have these conversations in order to get different perspectives on the issue.

“We all have a common thread that holds us together as human beings,” Boone said. It’s all about having respect for the other person and holding that conversation with them about their views and what they’re going to do about them.

“Every single person has to be responsible for the decisions that they make,” said Boone, “and to change the things that they can change within their little area.”

–Anna Tielmann (Taken from The Spectator Vol. III, Issue 23)

Financial Crisis Studied

March 20, 2012 / Anna / 0 Comments

Students and faculty who attended a presentation on February 29 on the U.S. financial crisis, discovered the reasons behind the recession and why the situation hasn’t been improving faster than it has been.

“It didn’t come out of the blue,” said Dr. Samuel Claster, assistant professor of sociology at Edinboro University. “It’s been a 30 year period of corporate deregulation of the banking industry and the financial system as a whole.”

Our economic system has a series of economic and political subsystems and in order for them to each function properly, they have to mix with people’s values, beliefs, attitudes and everyday lifestyles in a process called “socialization,” said Claster.

“Investment banking is the largest industrial sector in America and has been since the late 70s,” Claster said, “but a society cannot sustain when wealth is concentrated in that one economic sector.”

Yet, one of the problems with this is that the system pushes its problems on the citizens and hinders our ability to critically examine and question those in power and domination, Claster pointed out.

This then turns into “irrational functioning,” Claster explained.

America has one of the most advanced health care systems in the world, for example, but is 25th compared to other nations with the number of citizens because of our insurance industry, he said. This is the result of us “living in a society where the many are ruled by a few,” Claster said.

This can be seen in the way the mortgage system works.

In the video “Crisis of Credit Visualized” that Claster showed, Jonathan Jarvis, an interaction and media designer, says investment banks link families with a mortgage lender.

Investment bankers then borrow money and call up the various lenders to buy mortgages, which they then divide up into portions and sell to their different investors.

So, says Jarvis, when the homeowners default on their mortgage, it creates a problem. No one wants to buy a house that isn’t bringing in a profit and then “the whole financial system is frozen.”

“What caused the major collapse illustrates the interconnectedness of the banks in our entire financial system,” said Claster.

On September 7, 2008, the government took over and bailed out Fannie Mae and Freddie Mac, two of the major mortgage lenders, and on October 3, 2008, the Senate passed a revised version of Troubled Asset Relief Program (TARP).

“It’s a capital injection,” said Claster, “and what that means is that some of it is loans to come later, but for now they had to get money to the banks immediately.”

According to MotherJones.com, a news website, the banks were considered too big to fail, so one of the solutions was to make them bigger, such as have Wells Fargo buy Wachovia.

Other problems added to the crisis. Fraud, which is also known as “robosigning,” and Mortgage Electronic Registration System (MERS), said Claster.

“Robosigning sounds fancy, but it’s actually criminal,” said Claster. It’s when a person gets paid to sign the names of six or so bank presidents to hundreds of different loans without their consent. These are actual legal documents and this happens all over the country.

MERS may be an efficient way to keep track of the thousands of housing mortgages, “but it values efficiency over customer service,” Claster said. “People don’t know who owns their mortgages, they have no contact with them and they don’t know where the actual titles to their mortgages are.”

In 2010, the Frank Dodd Act was put into play. It created a lot of government regulatory councils and commissions so that they could redesign our regulatory system. “Yet, the things that have happened can happen again because new bubbles will burst,” said Claster. “Critics are pushing to break up the banks and stop making them bigger because what we’re actually doing is socializing our problems and privatizing our profits.”

The government also struck a $24 billion deal with Bank of America, Wells Fargo, and other major banks,” said Claster. Seventeen billion dollars would be set aside for credit forgiveness, while $5 billion would be put into cash payouts to those who have been foreclosed upon.

Claster asked, “Is the administration saving the system and making real good economic policy and reform or is it all part of a political strategy that keeps the two party system rolling on?”

Claster stressed that Americans must not always trust governmental decision-making. “We have experience and we have the expertise,” Claster said. “We can’t leave it to the people who rule this country.”

–Anna Tielmann (Taken from The Spectator, Vol. III, Issue 19)

PNC Spokesman Explains Economy

February 22, 2012 / Anna / 0 Comments

Last Thursday, February 9, students and faculty attended a presentation given by one of PNC Bank’s spokesmen, William Adams, on the current recession in Europe and what it could mean for the U.S. economy.

“We’re not on the same level as Europe in terms of national debt. But the reason we don’t have the same crisis that Europe is having right now is because we have coherent national economic policy,” said Adams.

This policy allows for the federal government to use tax money collected from other states to keep the economy from collapsing completely in another state, said Adams.

Europe has a different economic system called a currency union, where 17 countries share the same currency, but are not under the same government, like the U.S., said Adams.

Adams went on to explain that being a part of a currency union requires the countries to agree on a common fiscal policy, which is how much money the government spends and how much they can collect for taxes. A common monetary policy, which sets the interest rate for an economy, is required as well.

The European economy is going downhill because taxes have gone up, the government spending has gone down, and a lot of government workers have been laid off. “That is probably two-thirds of the reason why Europe is in a recession right now,” Adams explained.

The other one-third of the reason is the investors. “The big issue right now is the banks,” said Adams.

As debt prices have gotten worse, European bank stock has lost about 60 percent of its value. “The higher you are in debt, the harder it is to borrow money,” said Adams

Some economists say that the European recession is just a passing thing and the euro should return to its normal value by the end of the year. “I’m a little more pessimistic about that because… it’s not because of a business cycle, or because the stock market went up or went down. It’s because the institutions they have don’t work,” said Adams.

Unemployment rates also reflect the condition of the economy. In Spain, there’s a 23 percent unemployment rate, which means that about one out of four workers aren’t able to find work. The rest of Europe is at about 10 to 15 percent unemployment.

In comparison, The PNC Northwest PA Market Outlook report says that while manufacturing industries have cut jobs over the years in the U.S. and younger residents have left northwestern Pennsylvania and other states in search of faster growing job markets, the job growth across the country has been encouragingly stable so far through the recovery.

According to The PNC Financial Services Group, “the job growth will average about 140,000 per month in 2012, adding up to 1.7 million new payroll jobs over the course of this year.”

“Our expectation is that we’re going to finish the year with unemployment under 8 percent,” Adams said.

While the U.S. is going to take a small hit from the recession in Europe, our coherent economic policy will allow our unemployment rates to lower and the labor market is starting to show signs of recovering

“Our debt problems are just as serious as Europe’s debt problems and our deficit is nearly as large as the deficit of other European governments,” acknowledged Adams. But the reason we don’t see the effects of it is because we have a better monetary policy and an independent currency, he said.

“We’re showing signs that we are on our way to recovering from this terrible recession that we’re now finally getting out of,” said Adams.

– Anna Tielmann (Taken from The Spectator Vol. III, Issue 16)

Anna's Alcove

Let's do life together!

Tag: economy

Campus Pinpoints Details in Occupy

Financial Crisis Studied

PNC Spokesman Explains Economy

Recent Posts

Meta

Subscribe

Archives

Categories