Fannie Mae seeks $15.3 billion more in aid: Fannie Mae needs another 15 billion dollars worth in federal assistance, which brings them to a total of already 75 billion dollars. Along with needing more money, Fannie Mae was previously warned of their losses, and it will continue into 2010. Not only is Fannie Mae having issues but their sister company Freddie Mac “is turning out to be one of the most expensive aftereffects of the financial meltdown”. With both companies the total bill will be around 126 billion dollars. Unemployment is still high, and millions of people are still losing their homes through foreclosure “Fannie Mae reported Friday that it lost $74.4 billion, or $13.11 a share, last year, including $2.5 billion in dividends paid to the government. That compares with a loss of $59.8 billion, or $24 a share, a year earlier”. Fannie Mae was seized by federal regulators in 2008 and at the end of 2009 the Obama administration promised to cover their losses until 2012. Fannie Mae and Freddie Mac play an extremely important role in the mortgage market; they purchase and sell nearly half of all mortgages. Since the real estate market crashed, they have really been suffering “During the most recent quarter, Washington-based Fannie suffered $11.9 billion in credit losses and a $5 billion write-down for low income tax credit investments”
Friedman believes in separate economic and political activities. He believes the economic freedom in an overall part of total freedom. If you don’t have a free economy you don’t have freedom, and economic freedom leads to political freedom. Friedman believes that the economic and political system are not separate, they are a conditional relationship. The example we used in class is that people who have more money tend to have more freedom then those who don’t have money.
Ethical issue: If economic and political systems are separated, what happens when such companies like Fannie Mae and Freddie Mac need some kind of loan?
I believe that Friedman would not be against giving loans to such companies as Fannie Mae and Freddie Mac. Friedman believes that government should be dispersed, he imagines a fifth branch to the government, that an economy will serve to limit and disperse, the more freedom we will have , it will then limits governments influence. Friedman also believes that the government plays the role of the umpire. The government is there to regulate and serve the economy.
Sunday, February 28, 2010
Friday, February 12, 2010
Marx in the News
On February tenth public service civil servants went on strike across Greece. It was a one day strike against rigorous measures; officials stated that it was essential against their financial crisis. The article Greek Civil Servants Strike Over Austerity by Dan Bilefsky talks about how Greece has been under pressure from the European Union to cut most of their high budget’s. Greece is in danger of “failing to refinance some $28 billion in debt” ( Bilefsky, 2010). One out of three people are employed in a civil service. Civil service offers Grecian’s a job for life, but now they are being face with economic problems and “had exposed a general ignorance about the harsh realities of the global economy” (Bilefsky, 2010). Protesters stated that they are fully aware that they need to make sacrifices or going against their socialist Prime Minister where as others were hoping that the European Union would come and rescue them. This economic issue is not just effecting Greece but now is spreading to Spain and Portugal where they fear that budgets will not be trimmed. The government has frozen workers salaries but the government has publicized a 2.75 billion in public spending cuts “It also aims to raise $6.87 billion more from new taxes and measures aimed at fighting tax evasion, which analysts said deprived the federal budget of $44.2 billion last year” ( Bilefsky, 2010). The Greek government also introduced a higher gasoline tax.
Marx’s ethos is grounded in self- interest. It is guided to the productive power of labor who’s division will lead to a general opulence and civil law and order. Marx has three main points to his philosophy and Greek Civil Servants Strike Over Austerity covers his third point increase in production leads to a decrease of workers. The government is not spending money properly which leads to an increase of production and a decrease in workers. Lower cost of productions lead to the depreciation of labor value that leads to the division of labor which leads to wages to go down, that leads to unemployment and unemployment leads to undercutting of each other.
People need to survive, but with wages being cut people are being alienated and are only receiving enough to live. They are not receiving enough money to survive. Government spending is finally catching up to them and they are not able to give out the funds that need to be given out. The Greek civil servants will do anything to work because they are not making enough money, so they are reaching out to other Europeans nations because they need their help.
Marx’s ethos is grounded in self- interest. It is guided to the productive power of labor who’s division will lead to a general opulence and civil law and order. Marx has three main points to his philosophy and Greek Civil Servants Strike Over Austerity covers his third point increase in production leads to a decrease of workers. The government is not spending money properly which leads to an increase of production and a decrease in workers. Lower cost of productions lead to the depreciation of labor value that leads to the division of labor which leads to wages to go down, that leads to unemployment and unemployment leads to undercutting of each other.
People need to survive, but with wages being cut people are being alienated and are only receiving enough to live. They are not receiving enough money to survive. Government spending is finally catching up to them and they are not able to give out the funds that need to be given out. The Greek civil servants will do anything to work because they are not making enough money, so they are reaching out to other Europeans nations because they need their help.
Saturday, January 30, 2010
Locke in the News
Wind Turbines Leave Some in a Huff by Jim Carlton was published in The Wall Street Journal. Michael Deneui resides in San Francisco; Deneui is a 40 year old telecommunications consultant. Deneui wanted to be more “eco-friendly” so he decided to build a wind turbine hoping that it would result in a reduced energy bill. Though Deneui wanted to be more eco-friendly there was an issue with his wind turbine, “its pole is 35 feet tall. Mounted in the backyard, it can be seen a block away. And when it's on, the blades sometimes cast light reflections” (Carlton, 2009), which has caused a few issues with the neighbors. A few neighbors have complained of noise issues coming from the blades, whereas other neighbors have stated that though they can see it is not of any kind of nuisance.
Ethical Issue: Deneui built a wind turbine because he wanted to be more eco-friendly and save on his energy bill. He installed on his property with his money, so why is this so bothersome to the neighbors? If your neighbor did a similar thing would you approve of it?
Locke would argue that it is your own body and you put your own labor in it, therefore, you now own it. Deneui is not breaking any natural limits, he is not wasting anything or taking anything from mankind, so it should not be a concern to his neighbors. He is not installing it on anyone’s property other than his own. Locks view of money represents the labor value, and that is just what Deneui did, he put his money into the labor of the wind turbine.
Monday, January 18, 2010
Aristotle In the News
On January 15 there was an article on BBC news online titled JP Morgan Chase reports $3.3bn profits, followed by the sentence “Wall Street bank JP Morgan Chase has reported profits of $3.3bn for the last three months of 2009.” The article continues to compare the last three month profits of 3.3 billion to the total profits of 702 million at the end of 2008. The total profits for the year of 2009 were 11.2 billion where as the total staff compensation (salaries and bonuses) is around 27 billion. And investment bankers as individuals made a grand total of about 9.3 billion.
Ethical Issue: The investment bankers received a bonus that was 21% higher from the previous year, even though the company (JP Morgan Chase) lost 2.2 billion just in credit card business in the year 2008. So where is all this money coming from, that investment bankers are receiving? President Obama stated “If these companies are in good enough shape to afford massive bonuses, they are surely in good enough shape to afford paying back every penny to taxpayers"
Aristotle would argue the two senses of wealth being the art of acquisition which has limits; once we reach what we need we don’t need it anymore and the art of wealth-getting where riches and property have no limits. But are there are really no limits? Aristotle believes that business is necessary but looks down on corporation as a whole. Aristotle states that “true wealth is limited, but money making has no limit” (70). If JP Morgan is giving out 9.3 billion dollars in bonuses Aristotle would argue that the company should share when it is essential, if poverty levels are going up and companies are distributing billions of dollars in bonuses, then those individuals should pay taxes, and not be given special treatment.
Ethical Issue: The investment bankers received a bonus that was 21% higher from the previous year, even though the company (JP Morgan Chase) lost 2.2 billion just in credit card business in the year 2008. So where is all this money coming from, that investment bankers are receiving? President Obama stated “If these companies are in good enough shape to afford massive bonuses, they are surely in good enough shape to afford paying back every penny to taxpayers"
Aristotle would argue the two senses of wealth being the art of acquisition which has limits; once we reach what we need we don’t need it anymore and the art of wealth-getting where riches and property have no limits. But are there are really no limits? Aristotle believes that business is necessary but looks down on corporation as a whole. Aristotle states that “true wealth is limited, but money making has no limit” (70). If JP Morgan is giving out 9.3 billion dollars in bonuses Aristotle would argue that the company should share when it is essential, if poverty levels are going up and companies are distributing billions of dollars in bonuses, then those individuals should pay taxes, and not be given special treatment.
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