Since the end of the Cold War, the nations of the world have become increasingly interdependent. Interdependency is the idea that relations among states within the international system are mutually dependent and inextricably tied together. In theory, interdependency will lead to peace as war among the dependent nations is no longer feasible. A perfect example is the European Union and its pacifying impact on Europe. The history of Europe is as long as it is violent. Nevertheless, the region has been relatively peaceful ever since the nations of Europe became economically interdependent.
However, interdependency has a dark side. In this new era of globalization, sovereign nations can find themselves held hostage by the economic policies of other states. Imagine the impact on the world economy if Saudi Arabia decided to cease all oil production or if the United States instituted a trade embargo on all foreign products. The current Greece debt crisis is a real-world example of how the economic policies of one nation can severely hamper the economies of the entire Euro-zone, the United States, and the world.
With the aftermath of the recent economic recession and the impact of international trade agreements on domestic economies, should not the United States, as well as the nations of the world, strive to be self-sufficient?
Posted in Banks, Economic Policy, Fiscal Policy, Foreign Policy, National Security, The Economy
Tagged Cold War, Economic Policy, European Union, Eurozone, Great Depression, Greece, Greek, Saudi Arabia, United States
The $700 billion government bailout of the financial system ends on October 3. The debate continues as to whether the program benefited Wall Street at the expense of Main Street. Republicans try to capitalize on the unpopularity of the program in an election year while Democrats are forced to defend the program as having saved the country from another Great Depression. This article sheds light on the contending opinions over the program. (9/30/10 ABC News, Matthew Jaffe) … Read Article
1. What, according to the Congressional Oversight Panel, is the greatest consequence of the TARP?
2. Why is the TARP unpopular among many taxpayers?
Posted in Banks, Bureaucracy, Congress, Economic Policy, Elections, Political Parties, Presidency, The Economy, The Recession, Unemployment, Wall Street
The recent financial fiasco with big banks leaves consumers now having a second thought about doing business with banks. The Early Show’s financial contributor Vera Gibbons compares banks and credit unions. Would a credit union be a better alternative for you? (12/17/2009 CBSNewsOnline)
1. How would you determine which credit union to join. What are some specific signs to look for?
2. Compare bank and credit union rates for car loans and home loans as reported in the video. How do credit unions compare with banks in overall satisfaction rate?
President Obama today applauded the Senate for passing a sweeping overhaul of Wall Street regulations, and said he looks forward to signing it next week. “There will be no more taxpayer-funded bailouts – period.” (7/15/10 ABC News, Matthew Jaffe) … Read Article
1. Discuss Simon Johnson’s criticism of the financial reform bill.
2. Discuss the Republicans’ criticism of the financial reform bill.
With one in five Gen Yers unable to find work, a new “lost generation” may be in the making in Europe. Policymakers fear long-term unemployment could diminish the generation’s future prospects on the labor market. (7/24/09 ABC News, Mark Scott) … Read Article
1. “Delorme is typical of Europe’s Gen Y these days.” Discuss the employment condition of Europe’s Gen Y compared to that of the U.S.
2. Discuss the efforts made by governments in Europe to mitigate the effects of the economic crisis.
Wary of slamming on the stimulus brakes too quickly but shaken by the European debt crisis, world leaders pledged Sunday to slash government deficits in the most industrialized nations in half by 2013, with wiggle room to meet the goal. (6/27/10 Associated Press, Mark Smith)
1. Discuss how this year’s summit marks a shift from the last summit in Pittsburg.
2. Discuss the signs that G20 leaders declared war on government debt at the summit.
In a recent poll we asked MPSL students whether the federal government should regulate Wall Street Banks. The result: 29% strongly agree that the federal government should regulate Wall Street Banks; 43% agree; 20% disagree; while 9% strongly disagree. In a similar poll by Fox News/Opinion Dynamics Poll, 69% of Americans are in favor of the federal government imposing new stricter controls and regulations on Wall Street and the financial services industry; 20% oppose the idea; while 11% is unsure. Results were retrieved on 5/17/10, 8:00 PM PST.
Some lawmakers believe that the financial reform bill being pushed in congress will saddle consumers with bailout of big banks the next time the market goes sour. What do you think?
In the midst of a financial meltdown, employees at the SEC were surfing for pornography while on the clock, some for up to eight hours a day. Sen. Chuck Grassley talks about the investigation. (4/23/10 CBS News)
1. Senator Grassley said the public has the right to know the names of the SEC employees caught in the porn scandal. What do you think, should these people’s names be released to the public? Why or why not?
2. Do you agree with Senator Grassley that “heads should roll” in order for other public employees to learn from the bad behavior of these SEC employees?
The Securities and Exchange Commission has sued Wall Street giant Goldman Sachs, accusing the powerful banking firm of knowingly selling doomed mortgages to investors. (4/16/10 CBSNews, Anthony Mason)
1. What is the “single complaint” against Goldman Sachs according to the video?
2. Who are the two former Treasury Secretaries named in the video and under which presidents did they serve?