Kevin Woghiren

So, I’m in Boston taking a short break from the city of Chicago and I’m pondering about the coming new year: 2009.

2008 has been full of anguish and excitement on both the political and economic scene and I thought it would be a good idea to end a very historic and eventful year with a recap via the help of the Internet.
Although the global financial crisis from 2007 and violence plagued much of 2008, there was still much to be content with in some of the following highlights:

January

Crude oil futures hit $100 per barrel for the first time
    -The national weekly gas price on average in January was $3.09 per gallon
    -July had the highest national weekly gas price average at $4.11/gal

February

Iran opens its first space center and launches a rocket to space

Fidel Castro resigns from position as President of Cuba and his brother, Raul, is elected as his successor

March

Rising oil and food prices triggers riots in the Third World
    -The rise in prices was presumed to be caused by the effect of speculators on the commodities market

Bhutan holds its first ever elections
    -Bhutan is landlocked by India and the People’s Republic of China
    -The tiny country transformed from an absolute monarchy to a constitutionaly monarchy in 2008 and has been rated by Business Week as the happiest country in Asia

David Paterson becomes the first legally blind governor in the United States and the first African American governor of New York

Presidential elections are held in Zimbabwe

April

The Taliban failed in an attempt to assasinate Afghan President Hamid Karzai in Kabul, Afghanistan

India sets a world record by sending 10 satellites into orbit in a single launch

May

Over 200,000 people are killed in Burma and China by a cyclone and earthquake, respectively.

NASA’s Phoenix becomes the first spacecraft to land on the northern polar region of Mars. The spacecaft later confirmed that frozen water existed on Mars.
     -This was NASA’s sixth successful landing on Mars and the mission ended in November due to a lack of contact

June

Robert Mugabe is re-elected as President of Zimbabwe in the second round of the controversial Presidential election
     -A power sharing deal was later brokered between Mugabe’s administration and his opposition and complications between both parties still linger on

Bill Gates steps down as Chairman of Microsoft to concentrate on his philanthropic foundation

July

Ingrid Betancourt and 14 other hostages are rescued from the Revolutionary Armed Forces of Colombia by Colombian security forces after six years in captivity

112 people are killed and over 620 people are injured in a series of bombings in Instanbul, India, and Iraq

August

Summer Olympics take place in Beijing, China

Georgia and Russia engage in a 10-day war in South Ossetia after Georgia invades the tiny territory

Musharraf resigns from position as President of Pakistan under impeachment pressure

September

Asif Ali Zardari is elected as President of Pakistan

The world’s largest and highest energy particle accelerator, the Large Hadron Collider, is activated underground in Geneva, Switzerland

China becomes the third country ever to conduct a spacewalk

Largest daily point loss of 777 points in the Dow Jones Industrial Average

October

As the global financial crisis worsens, the Bush Administration approves $700 billion for the Treasury to puchase failing bank assets

World’s largest commercial carrier is formed after the merger of Delta Air Lines and Northwest Airlines

Largest daily point gain of 938 points in the Dow Jones Industrial Average
     -October had the two largest daily point gains in the history of the Dow Jones Industrial Average

November

Barack Obama becomes the first African-American and “self-recognized” bi-racial President-elect
     -On January 20, 2009 he will be inaugurated into the Presidency

Series of terrorist attacks kills 164 people and injures over 250 people in Mumbai, India

December

Riots spread in Greece after a 15 year old student was shot and killed by a Greek policeman during a demonstration against government corruption and the global economic crisis

Bernard Madoff, former Chairman of NASDAQ , is indicted on charges of financial fraud that could cost investors up to $50 billion

 

**If you have any other notable events of 2008 please feel free to include them via comments**

Happy New Year to all!

There needs to be a creation of a new socio-economic system, one that fosters economic growth not solely through consumer spending, less saving, and individualism but one through better accountability and responsibility. Capitalism has its roots in mercantilism and in order for it to work effectively it must have a consumer culture (people that are willing to define themselves through the products they buy without knowing the makers) and a low social class, consisting of people willing to work for unlivable wages and unaware of, or rather, indifferent to the injustice. As globalization continues to benefit and help stabilize developing countries worldwide, capitalism finds itself running out of a low social class and a new one to exploit. This translates into less future profits for corporations, which the stock market’s performance truly reflects. Although subprime mortgages, credit swaps, and financial speculators were key factors in the global financial system’s downturn, they are only the scapegoats for capitalism’s faulty and taut system.

This faulty system has led to loose morals, uncontrollable spending by the government, and a domino effect across the world’s largest economies; it is time for paper currency to be backed by something other than the good faith in the U.S Government. Although global liquidity is increased due to fiat currency, the ease in accumulation of debt is also proportional, thus the status quo. Now, I’m not calling for the reinstatement of the Gold Standard or a new Bretton Woods style conference of nations, but I am calling for an attempt by economists to seek stronger stability for the U.S. dollar, whose value has dropped over 20% in the last five years.

 

Gold cannot be the answer due to its inventory and supply limits but oil reserves can; the combined GDP of the world’s economy was over $65 trillion last year and the current barrels of oil in the worlds oil reserves is estimated at about 1.4 trillion. If you multiply this number by the price of oil in the range of $45-$70 per barrel then we can see how easily the total amount can be related to the world’s GDP in terms of purchasing power, thus making oil reserves (not oil contracts) a valid commodity to support paper currency. I understand there are barriers to this being a reality and the geopolitical complications that may ensue…but just a thought.

 

 

 

A recent national poll suggested that six out of ten Americans oppose a federal bailout of the “Big 3″ automakers in the United States: GM, Ford, and Chrysler. This majority consensus does not surprise me the least bit because the American public is a very knowledgeable entity or at least it likes to think so. In case you didn’t catch the sarcasm in the last sentence, I simply do not agree with the poll’s findings. The poll only truly reflects people’s emotions and “group think” attitude towards federal bailouts in general and we all know that emotion only clouds one’s judgment.

The U.S. Government should not only bailout the Big 3 automakers, but it must do so immediately and not vote solely on the emotions of the American public. Since January 2008, over 1.9 million jobs have been lost and many more are at risk if this bailout bill is not passed. Failure to pass this bill endangers the livelihood of over 2 million individuals employed by the “Big 3″, spanning various industries. “Bailout” seems to be the play in Washington these days but yet lawmakers are still not convinced on whether or not to bailout the auto industry. $34 billion is all that is being requested by GM, Ford, and Chrysler collectively; this is compared to the $150 billion bailout of AIG, $250 billion for Fannie and Freddie, $300 billion for Citigroup, and etc. Most people would argue that the delay in this bailout of the “Big 3″ is due to the fact that they have no concrete plans for restructuring or returning back to profitability. You know, that same “concrete plan” that Paulson gave to Congress for the passing of the $700 billion dollars earlier this 4th Quarter, which is still sitting in limbo. The US auto industry is in this predicament, not because of their lack of foresight, but their exceedingly high overhead costs, consisting mostly of union workers’ salaries.

Bailouts are not a new idea, in fact, the U.S. Government has been financially rescuing companies since the early 1900’s. Proof that the US auto industry bailout will not be in vain is evident in the bailout of Chrysler in 1980 for $4 billion in stock warrants. Three years after this bailout, Chrysler returned to profitability and its stock performance flourished. Chrysler then purchased back the stock warrants from the government, turning its $4 billion investment into over $600 million in profits.

Simply put: The “Big 3′ must be bailed out.

“The point is, ladies and gentleman, that greed — for lack of a better word — is good.
Greed is right.
Greed works.
Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.
Greed, in all of its forms — greed for life, for money, for love, knowledge — has marked the upward surge of mankind.
And greed — you mark my words — will not only save Teldar Paper, but that other malfunctioning corporation called the USA” (The movie, Wall Street).

There is not a more accurate definition of greed to date than this one provided by the fictional multi-millionaire and corporate raider, Gordon Gekko, in Oliver Stone’s 1987 classic, Wall Street. Greed is often associated with money or wealth by the hoi polloi in terms of money laundering by chief executives or the widening income gap between the rich and the poor; but, nobody ever wants to talk about the positives. Why should you be greedy? According to Gekko, you should be greedy because it is innate and your very survival and social advancement depends on it. We’ve all heard, at some point, the ideology, ‘survival of the fittest’; this ideology becomes more relevant today as globalization becomes more of a reality.

Globalization is the reason why the richest man in the world is no longer an American, a title Bill Gates, the founder of Microsoft, held for over a decade. Globalization is the reason why we all have friends online from all over the country and worldwide and yet we continue to seek more on popular websites such as Myspace.com and Facebook.com. Globalization is the reason why greed is here to stay and Gordon Gekko’s quote is still relevant after twenty years.

You should be greedy because you already are. Our greed for more friends to increase our friends’ list online, greed for achieving the American Dream, greed for love, greed for achieving good grades, and greed for power, are all healthy and required for humanity’s continued growth and increasing global competition. The critics out there may wonder about the effect of greed on social injustice, but I ask, isn’t greed for social justice a type of greed? For the sake of my argument, let’s forget that greed belongs to the nomenclature of vices referred to as the ‘Seven deadly sins,’ or that it carries a negative connation, or that it even exists in any lexicon. What we are left with is a classless, stateless, pseudo-utopia. This new pseudo-utopia can now be referred to as a communist or socialist entity.

The absence for the need to be greedy only creates an opportunity for the human spirit to become greedy as in the case of pre-WWII Europe and the likes of Adolf Hitler and Joseph Stalin. I perceive greed as being on both ends of a spectrum and in the middle is motive. One has the choice to travel right or left (or in this case, good or bad) with one’s motive but no matter the choice there will always be equilibrium, but that’s not to imply that there is equality in power distribution. Greed is like the internet, it is nowhere but everywhere or vice versa; in other words, no one claims to be greedy but we all are; as opposed to if we all acknowledged our innate greed then no one would be “greedy”. If success is supposedly 100% attitude, who’s to say greed should not be incorporated into one’s attitude?