Category Archives: Economy

The Washington Circus

With only one short day left before the US would have crashed into its first-ever default, Congress and the White House have finally settled on a deal on the debt ceiling.

But while the “clear and present” danger of imminent default is out of the way (for now at least), the federal government’s antics surrounding the normally simple process of raising the debt ceiling have scarred the political system this country stands on.

Anyone who’s followed the deliberations in the US Capitol over the debt ceiling has probably not been overly impressed with their elected officials in the past few weeks. As members of Congress, the president, the Tea Party, and leaders from both sides have gone at one another tooth and nail over the debt ceiling issue facing America.

And finally, a deal has emerged between John Boehner and Harry Reid, the de facto leaders of the GOP and Democrats in Congress (respectively), a deal that the president is willing to sign. But this deal is still far from law. An ongoing debate in Washington still threatens to derail it, as members of Congress on both sides of the aisle have objections. The deal has unsavory aspects to both conservatives and progressives: it cuts less spending than the former would like, and has almost none of the tax increases the latter was angling for. This means there’s still a decent chance this deal won’t go through.

But either way, this debate has already done serious damage to the federal government of the United States, and to the people of the country. Besides costing US taxpayers some $1.7 billion, this legislative monkey business has done real damage to the reputation of America’s lawmakers. Weeks of bickering and failed talks fulfill the stereotype that Congress is a lumbering legislative lump of inefficacy (alliteration always strengthens an argument, right?). Recent polls have shown that as many as 80% of Americans are dissatisfied with the actions of their representatives in DC.

So who’s to blame? Who is the ringleader in this circus?

Us.

One (and “one” includes myself) could certainly make a case that the Tea Party movement in the GOP ranks is largely responsible for the crap Congress has been trudging through. If it weren’t for their posturing and political machinations, the raising of the debt ceiling would have been perfectly normal. Like it always has been (the debt ceiling was raised 7 times during George W. Bush’s presidency). Tea Party members of the fractured Republican “coalition” in the House have made ridiculous pledges that pay no attention the real state of the country or its economy. In fact, some Tea Partiers have made it clear they would be willing to run the country into default, just to prove that “it wouldn’t be so bad.”

But as much as I would like to blame the Tea Party for everything happening in Washington, the truth of the matter is ultimately that the ringleaders of this circus were put into place… by us. Back in November of last year, the US people showed their impatience with Democratic leaders by electing a flood of GOP Congressmen and -women. These men and women, many affiliated with the Tea Party, promised to cut spending and “big government” if elected, which is exactly what they’re trying to do (albeit in a highly illogical fashion). Who voted them into office? The American people. And while most of us certainly would’ve liked to see a more mature electorate running our country’s finances, those who put the monkeys in this circus (So to speak. Maybe.) in the first place have to share some of the blame.

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Filed under Economy, Politics & Power

Blending the Line Between Business and Charity

The original (and very basic) $300 house design, showing the necessities that must be included in a valid entry into the competition. (Source: theglobeandmail.com)

I was recently listening to the Economist’s All Audio podcast (which, by the way, I would highly recommend), a fantastic source for news and analysis. In a (fairly) recent report, published on April 28, I heard about a wonderfully simple yet novel idea: A $300 house for the poor.

Living quarters are often given secondary importance in the fight against poverty by many. Things like the provision of food and medicine usually take the front seat, leaving living space as a kind of secondary concern when stacked up against what may seem like more important goals. But when one stops to think about it, living space has a direct effect on nearly every other aspect of life.

What’s safer, a mansion or a broken-down shack? Which has more reliable clean water? Which offers more protection from bug-born and other diseases? The places we live in are integral to our health. But an alarmingly large part of the world’s population isn’t afforded these “luxuries” by the places in which they live. A decent house, apartment, or other living space can act as a stepping stone to a better life for individuals and families in devastating poverty. But, according to a 2010 report by the UN, there were about 827 million people living in slums around the world in this year.

Here’s where the $300 house comes into play. A professor of international business at Dartmouth named Vijay Govindarajan issued a challenge of sorts to the business minds of the world: Turn your talents to housing the poor. Who better to find an economical solution to a global problem? Govindarajan and a consultant started an online competition to create a house that is sturdy and secure, and also provides basic necessities for its inhabitants, such as electricity and clean water. The winning design will then be discussed and improved, and ideally, will be invested in by global companies. In this way, the world’s poor can be aided without draining other parts of the world economy; businesses can reach a new kind of customer, and those customers can receive the support and shelter they need for day-to-day life at a price they can afford. As Govindarajan’s consultant, Christian Sarkar, put it, “We’re trying to encourage companies to look at the bottom of the pyramid, at the poor, as customers. What you’ve got to do is make it a business and make it to scale.”

Normally, I tend to draw a line in the sand between business and philanthropy. It’s an easy dichotomy to make: We think of business as the pursuit of personal gain, and philanthropy as the pursuit of others’ wellbeing. I have to admit that I tend to separate the two as well; in fact, I always used to tell myself that I could never go into business, because it would be too self-serving. But this idea, among many others, has proven me utterly wrong about this.

It’s true that in many cases, businesses do tend to be self-serving. The purpose of a business is to make money, so it can be very easy for those in the business world to become so focused on money-making that they lose sight of the great potential the business world has for helping the poor in a cost-effective way, something many charities couldn’t say. The $300 house idea is a great one, not only for its provision of safe and secure housing for the poor, but for its fusion of care for the poor and economic thinking. Many great ideas to help the poor have been held back by monetary shortcomings and lack of funding. But if the business world can continue to get involved in this kind of low-cost business to and for the poor, for everything from water filters to houses, then perhaps cost-effective charity could be much easier than we think.

I used two major information sources for this post: The Economist audio story I mentioned above, and a great article I found here, on The Globe and Mail.

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Filed under Economy, Human Rights

What’s Education Coming To?

Whats education coming to? (Source: Fungiftideas.org)

For the past few years, my university has provided a service called the Collegiate Readership Program. The program supplies daily issues of the New York Times and USA Today periodicals, in an effort to keep the student population informed and involved in the world they live in.

But over the past two weeks or so, the number of papers available has been dwindling, down to only a dozen or so in one building on campus. Now, this would be quite understandable if my university had fallen on hard times… but it definitely has not. The school, a fairly small private university in the Pacific Northwest, has had a veritable explosion in attendance numbers; my freshman class is the largest in the school’s history, and next year’s class is expected to be 20% larger than mine. To add to this, the school has a number of well-off benefactors and sponsors for all kinds of programs, and it’s expanding a number of facilities, especially its athletic programs. The school will have a football team (and a brand-new field) by 2013, and is planning two new living halls and a brand-new student union building.

So why the cutback on something as simple as newspapers, when the school is doing so well and expanding so quickly elsewhere?  I think this frustrating evaporation of my favorite newspaper from campus marks a frightening prospect about education as a whole: Many people don’t seem to be at college for an education, and many colleges don’t seem too concerned about providing one.

I see this terrifying trend not just on my campus, but in universities across the States. More and more, young people (I know, I’m a young person too) seem to be choosing their colleges based not on the school’s academic strength or educational opportunities, but on how many bells and whistles are stuck on. Schools are no longer competing for students by showing off their various programs and departments, but are instead improving their entertainment and social offerings: the dances, the sports, the on-campus cafes, and so on.

Essentially, students aren’t choosing their college because of the education that might come out of it; they’re choosing it because it offers them a spot on a team playing their favorite sport, or perhaps because it’s in a lively and entertaining city or area. Quality of education is still a factor in decisions, but it’s typically only one of many. The “college experience” consists not only of education for most young students, but also requires an entertaining campus, a high number of school-sponsored events and games, and a whole host of other needs that should be decidedly secondary to quality of education.

But more worrying is the seeming trajectory of the universities themselves. My school, as well as many others (especially private universities), are getting along quite well, despite this unfortunate economy. Students continue to pour in, as does money. But where is this money going? It doesn’t seem to be furthering the student body’s education nearly as much as it should! Universities’ cash reserves now seem to be less dedicated to the expansion of their educational capacities, and have instead become focused on improving extracurricular offerings, such as sports, gym equipment, and so on. Visit a college campus, and chances are that your tour guide will emphasize the fun things to do in town or around campus, rather than the school’s strong academics.

All of this makes one wonder: How valuable is a modern college education? Are the things learned here likely to lead to a more fruitful life, or will they only give a slightly bumped-up salary? These will be crucial questions in the coming years, including in my own life and university experience. I’m sure I’ll have more to say on this later, but for now, I leave you with a question: Is a university education worth the time and money anymore?

This post was heavily modified on April 25, 2011, after its original publication on April 14, 2011.

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Filed under Economy, Education, Uncategorized