Silent Archimedes

Posts Tagged ‘Economics’

Book Review: The Walmart Effect

Posted by silentarchimedes on March 20, 2009

The Walmart Effect

How the World’s Most Powerful Company Really Works – and How It’s Transforming the American Economy

Author: Charles Fishman

walmart-effectWHY I READ THIS BOOK

I do not like Walmart, yet I shop there. It is messy and dreary, yet I plan a trip to Walmart every few weeks. It is expansive, yet crowded and claustrophobic. I feel like I’ve spent just as much time there looking for either a product or an employee to assist me as I have actually shopping. I try to minimize my time there but the trip always ends up over an hour and I’m beat by the time I leave. Why do I keep going back there? To make things worse, all these stories about Walmart’s secrecy and unethical business practices keep popping up. Yet that has not stopped me from shopping there. The fact that Walmart has become ubiquitous with middle-class (and poorer) shopping has led most people to subconsciously accept it. So what is going on with Walmart?

THE AUTHOR: CHARLES FISHMAN

It must take someone with guts to take on the Walmart behemoth; especially after you read the book and realize that for most of its  history, Walmart has considered any type of publicity and media a threat to its business model. But Fishman has been known as an investigative reporter that attempts to bring to light the workings of institutions or groups that have been relatively unknown. According to the book’s website, Fishman has spent the past 20 years investigating organizations such as NASA and Walmart. He was also the first reporter to be allowed inside a Tupperware factory, and first in 30 years inside the nation’s only bomb factory.

SHORT SUMMARY

walmart_lowpricesIn an attempt to understand the inner workings of Walmart Inc. and its effects on job creation, global economy, work environments, suppliers, competitors, communities and other issues, Fishman talks with everyone that might be affected by Walmart but Walmart itself. Due to the secrecy of Walmart and the lack of transparency in its statistics, Fishman is forced to rely specifically on his investigative acumen. What he finds out is that Walmart is the ultimate definition of a dichotomy, a contradiction that baffles all levels of society; from the individual to the community to the country to the global economy. On one hand, Walmart is unpretentious, is no frills, provides hundreds of thousands of jobs, provides the cheapest prices for consumers and has always stuck to its core values. However, on the other hand, it has a dictatorial grip on its suppliers and competitors, kills almost as many jobs as it creates, indirectly destroys local natural ecosystems, promotes cheap labor and unfair labor practices, has no transparency or guilt and chips away at the core values of the free market system. It pushes the limits of good and bad capitalism and is the poster child of globalization.

REVIEW

This book really does a good job of trying to understand the Walmart effect. However, although Fishman tries to stay neutral on the positives and negatives of the issue, it is more common that his investigations lead to a negative perception of the company. It’s hard not to have a more negative view after reading the book. There is only one major positive about Walmart, it provides the lowest prices for many of the things families need. However, this is a huge positive and is shown even more during this recession. Walmart’s growth in same store sales have been increasing for the past 22 months while Target’s have fallen the past eight months (Source: Walmart vs. Target: No Contest in the Recession, Time Online). It’s not even a contest and shows that this positive is all that consumers need to turn a blind eye on all the other issues. And for sure, there are a lot of other issues, which Fishman does a great job of detailing and bringing out.

The book flows really well, from the beginning to the end… although the last chapter is the required “so after all this investigative work, what should we do or care about Walmart to make this world a better place?” The first chapter is pretty much a summary of Walmart’s influence on society. The rest of the book goes into detail about each issue by discussing academic studies on the company dating back to the mid-1980s, successful and failed interviews with former supplier executives from big and small companies, the impact of Walmart on things we take for granted now (like deodorants that sell without the useless boxes they used to come in) and talking to opponents of Walmart, from environmental groups to factory workers of their suppliers.

The most damaging against Walmart has to be that a lot of the investigation leads to the same conclusion, Walmart is a big cheapskate. Which was fine when it was a small company, but now that it is the biggest in the world, this sense of being cheap at all costs seems somewhat unfair. Unfair to other companies and unfair to the ecosystems and poor countries’ lax labor laws it depends on to produce such massive quantities of products. Fishman tries hard to not take a position, but the writing is in the book. There are no positives about Walmart that can be concluded from the Chilean Atlantic salmon farms, or the countless companies mentioned in the book that went belly-up after becoming a supplier of Walmart. There’s just too many examples to list. And it’s quite obvious that even the large companies that work with Walmart are under the control of Walmart.

There are some interesting stories in the book. The one I like best is about the company that decided supplying to Walmart was detrimental to its future existence, so it decided to end the relationship. However, Fishman argues that companies that don’t supply to Walmart are highly affected by them anyways because of the devastatingly low prices. Another interesting tidbit was that Fishman believes Walmart may hit a ceiling at some point and there could be, what he calls, Walmart saturation and exhaustion.

VERDICT

This is a very insightful book. Although there are only a few unbiased and encompassing studies on the Walmart effect, Fishman does a good job of investigating and doing his own research. This book sums up my initial motivation for reading  about the world’s largets non-oil company. Walmart is such a dichotomy it’s really difficult to come to a conclusion on whether it is good for society or bad. It has changed so much of everything that it is beyond anyone’s control. Many of the numerous statistics in the book are downright unbelievable. The book is a quick read, very interesting to read and will make you think twice about globalization and also your personal moral responsibilities to it.

The book was written in 2006 and only talks about the perceptions and actions of Walmart in the context of 2005. The major views of Walmart has not changed since then. However, the signs of Walmart exhaustion have gone out the window now that we are in a recession and most people have turned even more to Walmart for cheap prices. Walmart also has done more to improve the negative perception against it. Just a few days ago Walmart announced that they would be awarding $2 billion dollars to their employees. If Walmart decides to also target the higher end products, like Target, this might create a whole slew of new problems.

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Rating: 9 out of 10 Walmart smileys


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Posted in Books, Economics, Ethics, Reviews | Tagged: , , , , , , , , , , , , , | 4 Comments »

Is gold ready to break out after today’s rise?

Posted by silentarchimedes on January 23, 2009

What’s going on with gold today? Gold prices touched above $900/oz today and by mid-noon was trading over $40 higher to $899 an ounce on February deliveries. The highest levels since October of 2008. As of 12:52pm, the SPDR GLD is up over $4.00 to above $88 (4.00+%). The volume of 24 million at 1pm is already twice as much as the average daily volume of 12 million. What is also surprising is that the EURO to Dollar index is dropping today, signifying a strengthening US Dollar. In most cases, these two measures should move inversely proportional to each other (Well, technically, gold rises when the EURUSD=X also rises). So what to make of this move today?

One, it’s easy to say that the huge movement up is all due to the stream of negative economic news. Most daunting was the release of Britain’s GDP, showing the country’s most severe contraction in nearly 29 years. Which also officially pulled the UK into a recession. Additionally, bad earnings from a stream of companies have made today a safe-haven buying day, which lends credence to why both the gold and silver prices are rising, and why the US Dollar is also rising, due to an influx in US Treasuries buying.

However, there are two technical signals that are also resonating quite nicely with the tech gold bugs. Let’s first look at the trading band GLD has been trading in since it’s low back in Nov 2008. I have drawn in the magenta bottom trading boundary which GLD prices essentially hit three times (11/08, 12/08 and 01/09). I have also drawn in the magenta top trading boundary which GLD prices hit twice (end of 11/08, 12/08). In order to keep within this linear rising trading band, GLD would have had to make a move to the upside in the next week or two. Today’s rise only keeps GLD within this trading band and does not signify a breakout. However, because it is a rising trading band, then that bodes well that GLD will continue to rise in the coming weeks. Should it break above the top trading band, we might see a very strong move upwards and well past $100/share. If it breaks below the bottom trading band, then the fundamental breaks and we can see GLD once again test its lows in Nov 2008. Because there is strong buying interest today, this bodes well for GLD.

GLD trading band since Nov 2008 low

GLD trading band since Nov 2008 low

The second bullish signal might prove stronger than the above signal. Let’s look at the 50-day EMA and the 200-day EMA for GLD since 2005. Something is happening here that hasn’t been seen since September of 2005 when gold began it’s next bullish leg up from the $400s/oz to $1000/oz. The 50-day EMA breaking above the 200-day EMA. Although the below chart does not show it, today’s bounce up definitely will push the 50-EMA above the 200-EMA. This is a strong signal and it is coupled with strong volume, which shows buying conviction on the upside. When two long EMAs cross each other they signal long-term trends. You can see that when the 50-EMA crossed under the 200-EMA back in Sept of 2008, GLD dropped for a few months. This break back above 200-EMA could signal strong upside for GLD prices. Coupled with the trading band shown in the first chart, and we major bullish signals for gold in the next few weeks. As in my 2009 Predictions in my previous post, I expect gold to top $1000/oz at some point this year, possibly in February.

Have fun!

GLD 50-EMA ready to pass 200-EMA

GLD 50-EMA ready to pass 200-EMA

Posted in Economics, Observations, Opinion, Science and Math | Tagged: , , , , , , , , , , , | Leave a Comment »

My 2009 Predictions

Posted by silentarchimedes on January 22, 2009

Here are my 2009 predictions. None that are too far out there. Just a basic assessment of what I think might happen in 2009.

POLITICS

Barack the Celebrity

Barack the Celebrity

Obama’s approval ratings remain historically high but lower than the inauguration euphoria – Obama’s ability to inspire change and leadership at such a dour time in America gives him public leeway not seen since, well, 9/11. However, Obama’s pragmatism will help him keep the country on course and inspired throughout 2009. He has already made key changes in ethics regulations and state diplomacy in his first days in office. The only thing that will stop him will be… Congress.

Don’t expect much from Congress – Congress had lower approval ratings than President Bush in 2008, even with the Democratic majority and push for change. Expect the same from Pelosi and Reid, who are not strong leaders and have plenty of personal ambitions to prove Congressional strength to the Executive strength. Couple with the Republicans fight for relevancy, expect a 2009 of posturing and tit-for-tats. 2010 seems like a better year for Congress because the public will side with Obama over the frustrating bureaucracy in Congress in 2009.

ECONOMICS

The market moves sideways – There will be strong forces pulling the economy from both the recession side and the growth side. It is what I call the economic paradox. As the economy falls, oil prices drop and the US Dollar rises (somewhat surprisingly). However, as global growth resumes, oil demand and  commodity prices rise again and the US Dollar falls (since investors will begin investing in riskier assets instead of US Treasuries). Both are problems for America. Obama seems focused on passing bills and bailouts that will help light a fire under the economy, especially job market. However, the more he does the more inflation becomes a risk. Expect several major rises and several major slides, but by the end of 2009, the Dow Jones will still be in the 7500-9000 range.

Gold surpasses $1000/oz again – Because of the economic paradox, gold will continue to maintain its safe haven status in 2009. One of these days, gold will surpass $1000/oz again. In looking at the GLD chart, gold hit a low in mid-Nov 08 and has since built a nice rising linear resistance that it bounded in early Dec 08 and mid Jan 09. If gold breaks the upper linear resistance of $900/oz expect $1000/oz in Feb 09. If it does not expect a pullback. Aside from the technicals, 2009 is still a year of unforeseen economic strife and that will keep the price of gold high. Depending on where the economic paradox is at the end of 2009, gold will either be well above $1000/oz or testing it’s multi-year lows of $700/oz again.

Gold (GLD) prices from Jan 2008 to Jan 2009

Gold (GLD) prices from Jan 2008 to Jan 2009 (12-EMA green, 50-EMA red)

There will only be one viable American automaker by year’s end – The Big Three is already, in essence, the Small Two. Chrysler’s recent gift of 35% stake to Fiat for its access to technology and services is a desperation move to prove to the U.S. government that it has a viable plan to survive. However, the U.S. government is not going to perpetually support a half-foreign owned company at taxpayers expense. As for GM and Ford, 2009 will still be a very tough market. Any uptick by buyers will simply be for fuel efficient cars built by Toyota, Honda and even Hyundai. GM is effectively surviving on federal assistance, which runs out every few months. A radical solution has to found soon. Don’t fret though, because of the uniqueness of this market, hopes abound for small automakers that can make a difference in “green” vehicles.

SPORTS

yankeesYankees back in business – Sorry non-Yankees fans, but 2009 is appearing to be the Year of the Yankees. A new stadium, a team salary in excess of $200 million, a re-focused Arod with Mark Texeira pushing him, injury free Posada, Matsui and Chamberlain? It’s gonna be a great three-team AL East battle all summer. Yankees will win the division and make it to the World Series once again.

Posted in Economics, List, Opinion, Politics, Sports | Tagged: , , , , , , , , , , , , , , , | 1 Comment »

Opinion: It’s time for Dick Cheney to just leave quietly

Posted by silentarchimedes on January 8, 2009

The VP and P

The VP and P

Another story from the arrogance and incompetence of the Bush administration. Today, Vice President Dick Cheney was quoted in an AP interview,

In an interview with The Associated Press, Cheney also said that Bush has no need to apologize for not foreseeing the economic crisis.

“I don’t think he needs to apologize. I think what he needed to do is take bold, aggressive action and he has,” Cheney said. “I don’t think anybody saw it coming.”

The last part is what really got me mad. A LOT, and I mean A LOT of people saw this economic crisis coming. Let’s take a quick look at some of the groups of people that saw this coming:

1. Gold bugs – Gold investors have been preparing for this economic crisis since the crash of the dot com era. Gold has steadily risen from the mid $200s/oz to a high of $1000/oz, and now at ~$850/oz today.

2. Currency investors – The euro to dollar ratio was at 0.85 at the beginning of the dot-com crash in 2001. Since then it has flipped and risen so quickly to 1.60 in early 2008. Most people familiar with the dollar index, fiat currencies and supply/demand saw this as a huge omen of future economic turmoil. It was only a matter of when.

3. Housing investors – The term housing bubble was surmised to be occurring well before the height of the housing bubble. Many people burned by the dot-com era and became fiscally responsible saw the non-stop rise in housing prices as a major deja vu.

4. Economists – There have been so many books written on this exact economic crisis in the past ten years, of which two have been reviewed on this blog (Crash Proof, The Coming Economic Collapse). Anyone who has read one of these books realized that the American economic system has been living on borrowed time and money.

5. Historians – History comes in cycles because the leaders don’t learn from history. The Iraq War and the recession afterwards first played in the first Bush administration. Instead of learning from it, the younger Bush repeated the exact same historical events.

6. Most sane people – I saw this economic crisis coming a few years ago when I started reading about the US economic system. A lot of my friends saw it coming. A lot of people knew that we only got out of the tiny recession after the dot-com crash and 9/11 because Greenspan and the Feds loosened the credit spigot and money-printing machine. What ensued was the housing bubble and more mortgaging of America’s future.

If all these people, including lots and lots of Americans saw the economic crisis coming, you are telling me the Feds and the economists that govern this country didn’t see it coming? Please… They just chose to look the other way. Why not? They are rich. There is no accountability. Leave it to the next administration or future generations to clean up the mess.

It’s really absurd that Dick Cheney deflects the Bush administration’s responsibilities by claiming that NO ONE SAW IT COMING. To put it nicely, the arrogance, narrow-mindedness and stupidity of the outgoing administration continues. The Bush administration continues to hope that in time history will judge them nicely, but I believe this second recession under their watch pretty much locks in their incompetence regardless of how well Iraq or Afghanistan turn out.

Posted in Economics, Opinion, Politics | Tagged: , , , , , , , , , , , , , , , , , , , , , , | 2 Comments »

Modern credit cards and personal debt the result of deregulation of state usury laws

Posted by silentarchimedes on October 9, 2008

Time line of the history of credit cards

1887 – The term “credit card” is first coined by utopian author Edward Bellamy in his 1887 book Looking Backward.

1920s – The Great Depression introduces the credit card model to the general public.

1950sDiners Club evolves into the first credit card company.

1978 –  Marquette National Bank of Minneapolis vs. First of Omaha Service Corp. –  Supreme Court rules that companies can export their state interest rates on loans to customers in other states. In essence, deregulating long usury laws that regulated the ceiling on interest rates.

Early 1980s – Sioux Falls and South Dakota remove long usury laws regulating interest rates on all types of loans.

Early 1980s – Citibank moves credit card headquarters in New York City to Sioux Falls because NYC had a 12% limit on loan interest rates. Sioux Falls soon becomes the credit card capital of the West.

Early 1980s – Delaware copies South Dakota and relaxes many state usury laws. Wilmington soon becomes the credit card capital of the East.

Credit Card Mania

Credit Card Mania

The rest is history. With further deregulation approved by the Reagan administration and their belief that debt is good, the general public began accepting credit cards as a major alternative to already earned money. Competition increased and customers were issued credit cards with minimal background credit checks. Banks began lowering rates to risky customers because they can cover their defaults and risks  by spreading the costs to their new base of stable customers. This is similar to how insurance companies work.  Credit bureaus began collecting tons of data on consumers and banks would analyze them to target specific consumers. Credit cards became the most profitable section of the banking industry with $30 billion in profits in 2003.

Personal debts skyrocketed. Other forms of credit cards were freely issued. Stores began issuing them. To stay competitive, banks began offering cash back and rewards programs. In essence, the entire profit of the credit card industry was based on taking money from the future livelihoods of consumers. For the first time ever, the savings rate of Americans became negative.

Before credit cards, Americans were known to be good savers. Since the deregulation of interest rates, Americans have less money than ever. They have mortgaged their futures to support their current exorbitant living standards.

Deregulating NYC Rents

Consequences of deregulating NYC Rents

COMMENTARY

Not all regulation is bad, and not all regulation is good. It has to be done carefully and with plenty of oversight. There has been or is regulation everywhere in our lives. When we were kids, our parents and teachers regulated what we ate, how much money we had, and how to spend our time. When we are at work, companies and labor laws regulate our actions.  When we are in public places, there are laws and regulations. It has been shown that people as an entity are not responsible and disciplined enough to regulate all their individual needs. When most of us don’t know how credit cards work or how mortgages work or how our health care works, is this really the time to deregulate more? As our daily lives become more complicated, the last thing that people want to worry about is monitoring their 401k everyday, deciding which health plan to buy  and wondering which mortgage to get. Some things we want the government to do for us, and to look out for us, and to make things easier in our lives. We don’t always want to make decisions and tough choices. Look at the obesity rate in this country. You think most people can take care of themselves? There needs to be a balance of both. There has been too much deregulation the past 30+ years and it has led to many of the major problems in this country right now.

Don’t think deregulation is always in the interest of consumers either. Yes, there is usually more competition which leads to lower prices, but you have to remember, that these super-humans…err.. corporations still need to make a profit. At the end of the day, they will find a way to pass that cost onto you, either by cutting corners (airlines), or charging for non-necessities. Have more faith in our government that it can still do the right thing. Bring more faith to the government by voting in people that actually are practical and look out for the interests of middle class America.

Watch The Secret History of Credit Cards online at PBS!

Posted in Economics, Politics, Poll | Tagged: , , , , , , , , , , , , , , , , | 7 Comments »

McCain’s political campaign moves all backfiring on him

Posted by silentarchimedes on September 30, 2008

The failed bailout plan is another in a long line of political campaign moves that has blown up in John McCain’s increasingly desperate campaign. Here are the top three:

Where is Sarah Palin?

Where is Sarah Palin?

1. Picking Sarah Palin as Vice-Presidential candidate – When McCain saw that a large amount of Hillary Clinton supporters were still upset at Obama’s handling of the VP vetting process and eventual selection of Joe Biden, he took that as an opportunity to kill three birds with one stone. To appease the Clinton supporters and disenchanted female voters by selecting a young female candidate. To fortify his maverick reputation by selecting someone no one expected and is a Washington outsider. And to excite his core conservative base by selecting someone who is pro-life and pro-gun.

This move worked for exactly one week. Although it did and still does excite his core constituency, he has instead turned off the independent voters, women and solidified Obama’s base. Palin has since been exposed as someone completely inexperienced and out of her league. McCain has had to retract several of her public statements. His campaign has hidden her from the public view for fear of her saying something to the detriment of his campaign. While Biden has performed over 100 public interviews since his selection, Palin has done less than 10. He has surrounded her with former Bush advisers in training her to follow his views instead of her own views.  Instead of a game changer, she has become a distraction and stress.

McCain hugs Bush

McCain hugs Bush

2. Choosing to use lies, misinformation and misdirections in campaign – McCain’s campaign has increasingly used devious tactics in attempts to dishonestly smear Obama. The lies and misinformation have been so obvious that the majority of the media and public have picked this up. McCain instead lambasted the media for being biased, and that has also backfired. Instead of talking about issues, the campaign has used misdirections and attacks instead of responding with what they would do. It is becoming increasingly clear that his campaign is being influenced by the ultra-aggressive campaign advisers from George Bush. The whole win at all costs is backfiring at a time when the country wants honest change and not the same ole political moves.

McCain suspends campaign

McCain suspends campaign

3. Suspending campaign to push for bailout plan – The latest move backfiring on McCain might be the straw that breaks the camel’s back. Because the public views Obama as someone better capable to address the economy, McCain had to do something to show he is more capable at handling the economy. Last week, he decided to suspend his campaign, including the scheduled Friday debate with Obama, to go to Washington and push for the bailout plan. What seemed like a focused move was seen by the media and public as purely a political move. It only accentuated his potential inability to handle multiple crises as president. People clamored that if he was president, he can’t just put one crisis on pause while he handles another. Additionally, the public especially wanted to see the candidates speak at a debate, at a critical time like this. They saw it as a cop-out by McCain to suspend the debate. To make matters worse, legislators from both parties in Washington saw him as a distraction to the experts dealing with the bailout plan. As the bailout neared for a likely success, McCain began attacks at Obama for not doing enough to help the bailout plan and began patting himself on the back for pushing for the plan. However, in a stunning final straw, the bailout plan was rejected in the House yesterday. More than 60% of his party voted against the plan that McCain said he aggressively pushed for. McCain’s ability to even convince his own party had failed miserably. The public was strongly against a plan that seemed to bail out Wall Street and not help the common people. It will be interesting to see the fallout from this in the coming polls.

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Striking similarities between the two Bush presidencies

Posted by silentarchimedes on August 23, 2008

You would think that after the elder George Bush presidency ended in such economic turmoil and low approval ratings that the country would think twice about picking another Bush as president. Well, it happened. As the younger Bush’s two-term presidency comes to a close this year, one can’t help but look back at the eight years of chaos and controversy to see striking similarities between the two presidencies.

George H.W. Bush George W. Bush
George H.W. Bush George W. Bush

1. Approval ratings – Both Bush presidents saw very high approval ratings in the early part of their presidencies. However, this had more to do with patriotism at the start of wars rather than what the presidents had actually done. This point is supported by looking at Truman’s approval ratings during WWII.

What makes the Bushs similar is the precipitous drop of approval ratings for the rest of their presidencies.  Neither was able to transform early support to long-term success. The elder Bush was unable to transform a very popular and successful Persian Gulf War into domestic success. Note that the graph below shows younger Bush’s lowest approval above 30%. However, many polls had it in the 20s.

Approval Ratings of US Presidents since 1945

Approval Ratings of Past and Current Presidents

Iraq War

Iraq War

2. Iraq War – Both presidencies have been defined by a war in the middle East. Not just any war, but wars led by the United States against Saddam Hussein and Iraq. The first Persian Gulf War was highly successful, both in terms of tactical combat and political endearment. The unprovoked invasion of Kuwait by Iraq led to a swift overwhelming response by the rest of the world, including most of the other Middle East countries. The second Gulf War has become a completely different story. A preemptive offensive led by W. and the United States against Iraq for its supposed burgeoning nuclear capabilities has led to far-reaching implications. The evidence for war has since proven highly exaggerated. The complications of ethnic fighting has drawn the war into its fifth year. With recent lowering of violence, the key issue now becomes how long the United States will have a presence in Baghdad.

3. Economic turmoil – The past two recessions in the United States have both been under the Bush presidencies. With a third, and a second in W.’s reign, possibly on the way. Although both have been relatively short, it can be argued that the irresponsible short-term actions of the Feds and Alan Greenspan prematurely moved the United States out of the recessions, but at the expense of future credit.  The Persian Gulf wars also took much needed domestic cash and credit to fund the wars, which led to huge increases in national debt.

Recessions and Job Growth in the U.S.

Recessions and Job Growth in the U.S.

Dan Quayle

Dan Quayle

3. Incompetent vice-president Dan Quayle and Dick Cheney? ‘Nuff said. The first was intellectually incompetent and had the foot-in-mouth disease. Po-tay-to, po-tah-to, either one is fine. But potatoe?? What about Quayle comparing himself to JFK during the election campaign? Other funny sayings? “We don’t want to go back to tomorrow, we want to go forward“, “The future will be better tomorrow“, “I love California. I practically grew up in Phoenix“, and “It’s time for the human race to enter the solar system“. Although the country mostly knows him as the vice-president, another interesting question that needed to be asked, what were the people in Indiana thinking electing him to the House in1976 and 1978, and Senate in 1980 and 1986?

Richard Cheney

Richard Cheney

Then there’s Cheney. The ultra-hawk who is more inconspicuous than Ed Harris as a sniper in Enemy at the Gates. Actually, Cheney’s head is just a rounder version of Harris’. Cheney acted like a sniper, incognito, firing barbs from behind the scenes, or inside a bunker. Round after round of incidents, Cheney appeared impervious to controversy. He weathered the weak WMD evidence for attacking Iraq, the CIA leak scandal, the hunting incident, CDC global warming testimony deletions, health problems, and completely elitist, hawkish comments. Both supporters and detractors of Cheney regard him as a shrewd and knowledgeable politician who knows the functions and intricacies of the federal government. This is a major contributor to him weathering controversies.

Can you believe that both Quayle and Cheney were each one incident away from becoming president of the United States?

Vladimir Putin

Vladimir Putin

5. The Russian Bear – Both presidents had issues with Russia, although in differing directions. The elder Bush oversaw the end of the Cold War and the deconstruction of the Soviet Union. The younger Bush is seeing the return of the Russian Bear led by former KGB man, Vladimir Putin. As Russia’s fortunes increase due to expansive petroleum exports, it has steadfastly returned to old Moscow traditions and become more emboldened. The recent Russia-Georgia war shows its increasing power to defend and expand its circle of influence.

6. Supreme Court appointments – Both presidents oversaw the appointment of two Supreme Court justices. H.W. appointed David Souter and Clarence Thomas, to replace William Brennan and Thurgood Marshall, respectively. W. appointed John Roberts and Samuel Alito to replace William Rehnquist and Sandra Day O’Connor. Although Bill Clinton also appointed two new justices, the appointment of four by the Bushs has kept the Supreme Court in a slight conservative slant.

7. Next president is young and new to national scene – If Barack Obama wins the 2008 presidential election, both Bushs will have been succeeded by young Democratic presidents in their 40’s, Bill Clinton and Obama. The Democratic presidents will both be elected on a change platform that invigorated the public. Both will also have been new to the national scene.

With such striking similarities between the Bush presidencies, a lot of people were a bit hesitant to support another candidate, Hillary Clinton, that would have led to comparisons to her husband’s presidency. Had that happened, the United States would have had either a Bush or Clinton in the top two positions of the country for atleast 32 years!

Posted in Economics, List, Opinion, Politics | Tagged: , , , , , , , , , , , , , , , | 7 Comments »

The beauty of Dubai. Oil funding a true oasis, or is it?

Posted by silentarchimedes on August 18, 2008

The beauty of Dubai. Oil funding a true oasis, or is it?

Before the year 2000, I heard of Dubai (left, courtesy of Wikipedia) maybe once in my life. Now, every few weeks, there is some big financial news about Dubai. All of which are big in magnitude and some beyond the scope of reality. Why this sudden change in fortune in just a few years? Due to its location in the Middle East, the quickest reaction is to proclaim its wealth as a result of revenue from sky-high oil prices. However, that is not the case. Although it is true that oil provided much needed funds and backdrop when Dubai gained independence from the United Kingdom in 1971, today it only accounts for 6% of it’s US$37 billion GDP. This is an amazing statistic and it speaks strongly of how a Middle Eastern country that promotes free trade, diversity, tourism, relatively diverse media, and relative equality can be wealthy without oil revenues.

RECENT HISTORY

The United Arab Emirates was formed in 1971 when Dubai and five other emirates came together. In general, an emirate designates a political territory that is ruled by a dynastic Arab Monarch styled emir. The only other independent emirates in existence are Kuwait and Qatar. 1971 is of significance because that is when the United Kingdom ceased protector status of Dubai.

In 1979, the Jebel Ali Free Zone was created. It was created as a free economic zone, which offered corporations generous tax incentives to develop in the area, and allowed foreign companies unrestricted access, both in import of labor and export of capital. The Jebel Ali port (right, courtesy of Wikipedia) is now the 9th most active port in the world, in terms of container traffic. This was probably the most influential move in Dubai’s history that set the stage for present wealth. Since Dubai (and the UAE) is so small, the revenues from such an economic zone are tremendous.

The success of the Jebel Ali Free Zone has led to other free economic zones in Dubai. The Dubai Internet City houses corporations targeting emerging markets. The restrictions for foreign corporations are minimal. For example, companies may retain their 100% foreign ownership in the zone. This has led major corporations, such as Microsoft, IBM, Oracle, Sun, Cisco, Siemens, and Nokia to set up operations. However, internet restrictions do exist, such as website access to alcohol and gambling. Although they can be legally bypassed by accessing corporate VPNs in internet-free countries. Other free zones include the Dubai Media City and the Dubai Maritime City.

AN EMERGING OASIS

One simple look at  Dubai in 1990 and in 2003 shows what has changed:

Dubai in 1990

Dubai in 1990

Dubai in 2003

Dubai in 2003

The pictures above are courtesy of Essential Architecture. Look at their webpage with lots of pictures of what Dubai has become! It is utterly amazing!!

Essential Architecture of Dubai

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