Economic Tsunami and Current Economic Strategies

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Table of Contents

Introduction
Book review
The current economic tsunami and views of the current Obama economic strategies
Conclusion
Works Cited

Introduction

The current economic situation in the world is the result of a great number of different factors including the sphere of finance. The great financial crisis of the 2007-2009 made the whole world shudder. No one expected the crisis; moreover this one appears to be even greater than the Great Depression of the 1930s which struck the economics of the world. “Of course, turning our backs on the neediest cases (and denying bailouts to countries in crisis) is easier in theory than it is in practice” (Wheelman, 225).

In the very beginning of the presidential career Barak Obama represented his ideas about the current economic situation and the ways to improve it. The previous government rejected the possibility of the financial crisis and refused to acknowledge it. The statements made by the representatives of the government in press were vague and improvised.

The first task which Obama and his administration had to fulfill was the economic strategy and a program to make the housing market steady. The president and his team encountered three major problems which were to be solved. The first problem is called the credit crisis: as the United States of America is the largest banker of the world, it issued a great number of loans including the loans to its own citizens. “Consumers are shell-shocked, firms are hunkering down for recession, and credit is now falling because of both reduced demand and tighter supply” (“Guest Post: An Economic Strategy for Obama”, 1).

Besides, the problems within the financial sector of the real economy are spread all over the world; and it seems impossible to return to the previous situation and the prosperity level, as the financial sector of the real economy of the united states of America was based on risk models as well as on the capitalization ratios. The economic tsunami affected every member of the global society (“Guest Post: An Economic Strategy for Obama”, 1).

The advantage of the economic crisis for the United States of America lies in the opportunity to renew the economics of the country and to change the direction of the investments from the services sector into the technological development and manufacturing. The capital markets depend on the efficient management and innovative technologies.

The current paper needs the basic books on economics to be discussed as these works represented a diversity of approaches towards the explanation and analysis of the current economic situation in the world, taking into consideration the previous experience in the sphere of finance:

“The practice of economics is just beginning to understand the profound implications and diverse problems of technological change. The issue of innovation and intellectual property should receive more attention from economics because the pace of innovation has increased and a larger share of goods is sold with intellectual property rights protection” (Mann, 119).

Book review

Thus, the first book that should be analyzed is New Ideas from Dead Economists – an Introduction to Modern Economic Thought written by Todd G. Buchholz. This book gives vivid examples of the influence of the economic theories established by economists of the past on the current ideas and concepts developed by contemporary critics and scholars.

The book introduces the network economy which is the sphere of electronic commerce transactions, business, finance, communications, and social conditions. Developing countries experience a number of changes including such spheres as economics, politics, social issues and historical factors.

Designing many-sided institutions that could apply global issues was accessory as were believed after national safety was made hard by receiving martial power and political influence. To date most political leaders have common intentions, interdictory towering costs can be brought by their search for the self advantage of the nation. A large number of issues they deal with cannot be resolved in one-sided manner (Kegley, 398).

The book by Todd G. Buchholz turned out to be more interesting and useful than I expected. In fact, this book is a godsend for university teachers whose undergraduate students annoy them for appropriateness in the teaching of economic theory. It will be believed as an essential text, and for many principal directions of theory methods, it must also take its place on the bookshelf of every successful economist.

Buchholz likes risk. He tries to gain popular favor by crude appeals constantly; he never hesitates about making unsuitable declarations that provoke debate. In 300 pages, he falls into the plan of highly influential economic problems from Adam Smith’s discord of work through to monetarism, Rational Expectations and public choice theory.

Only two-thirds of this work is really about dead economists; the last third tells about the second half of the twentieth century and takes notice of economic speculators who are still alive. The final chapter accepts that economics is incomplete, and that all economists heretofore have had certain restrictions, and that the perpetual interaction between the private economy and the government are combined with a common thread, which goes through all economic discussions.

Certain parts are represented as a theoretical reason for discounting the public choice school’s gloom about government, on the grounds that government has no effect anyway. There is perhaps a touch of disingenuousness here (the policy ineffectiveness proposition related really to macroeconomic policy, whereas the public choice critique is more focused on micro policy).

A more sufficient issue for economists is that Buchholz has also met more complicated unformulated challenge: to be populist and approachable without losing the essence. It’s the most clear focal point on big economic issues and the clearness with which they have been purified into this book that convince the professional reader to pardon the provoking secondary action with which Buchholz tempts the profane public into listening to the firm essence (Bertram, 1).

The next book that is of great importance for the research is Hot, Flat, and Crowded: Why We Need a Green Revolution–and How It Can Renew America written by Thomas L. Friedman, globalization wise man. The book tells about the consummate hurricane the world experiences, with peak oil, global warming, and an unrestrained worldwide population that (in spite of the sideshow known as the “baby bust”) before it levels off around 2050 is sure to increase to more than nine billion.

So, as it is mentioned on the book we’re increasingly stretching the planet’s facilities while getting ready to increase the population by 2.5 billion world citizens. The author claims that our planet is our home, it overcomes a kind of crisis, the mankind caused the global warming, and it should counteract the environmental devastation, and renew the connection with the good earth.

In previous times, the answer about the issue of successive actions of states was simple: every state should grant security against outer assault, encourage prosperity of its inhabitants and guard the national values. Political authorities shadowed an extensively realistic scenario, laying their nationally applied concern forward the spacious global concerns.

Such position presupposed a competition with others countries for high status, strength, and position. Price for electricity has an essential influence on the place of new informational centers. The price for electricity is different around the world. “In a world that is getting hot, flat, and crowded, the task of creating the tools, systems, energy sources, and ethics that will allow the planet to grow in cleaner more sustainable ways is going to be the biggest challenge of our lifetime” (Fiksel, 357).

Thomas Friedman thinks that the confluence of IT and energy techniques corresponds to all the systems of power in the home, being connected to information systems devoured into one integral system for buying, producing, keeping, using, selling clean electronics. “Friedman sees the need to have information technology and energy technology, IT and ET, merged into a single system that he calls an Energy Internet. He envisions how professionals with IT skills be needed to build integral components of this clean-energy Web” (Lamb, 281).

Friedman’s injunction is for steadiness and a green energy overturns, and to establish his ideas in the native country he travels all over the world, having talks with Chief Executive Officers and heads of states. Thomas Friedman pictured the influence of the adulatory global economy. The book itself is about the idea government entailed in the United States’ changing of image, it depicts debate on this issue.

Friedman offers a solution to the problem by shaping the market differently by means of the kinds of public policy that is pushed for, containing motives for power companies to purchase energy from purer sources while cooperating with corporations and customers to utilize less electrical energy by means of complex technologies of switching the light (Magee, 130).

Energy security and climate change are now the objects of the open confrontation. The dependence on oil is a burning issue in both problems, and a number of other important problems are to be solved. In case there are no well-considered actions, the situation will not be changed soon, and will not be able to resist the climatic problems.

Problems of the climate change and energy security are of global character, and settling of them needs a global organization (Stoft, 245).

“Any organization of producers aimed at reducing supply is a producers’ cartel. Any organization aimed at reducing demand is a consumer’s cartel. A consumer’s cartel brings precisely the changes we seek. By definition it reduces consumption, as fixing the climate requires” (Stoft, 245).

OPEC (Organization of Petroleum-Exporting Countries) is a cartel whose purpose is to measure rich and poor world. By the way, under the most favorable conditions employ insufficiently their spoils. The main aim of an oil consumers’ trust would serve to finish the measuring and protect the climate (Stoft, 246).

One more book which illustrates the hidden influence and the possible effects of the world economics is Turbo Capitalism Winners and Losers in the Global Economy written by Edward Luttwak. The author does not describe the capitalistic countries of the twentieth century, either does not he comment on the economic situation in those countries.

Though the capitalism is considered the integral part of the twentieth century European countries, Edward Luttwak reveals the truth about the current capitalism of the free market. The author discusses the influence of the turbo-capitalism on the current situation in the world market, analyzes the government regulation of the market; “Turbo capitalism may or may not accelerate economic growth” (Luttwak, 9).

Thus, the notion of the turbo-capitalism can be considered through the concept of privately owned enterprise free from regulation from the side of government; the enterprise which is not involved into trade unions or other associations of the employees and unimpeded by taxation.

People who use this equal-for-all situation become much richer than those who wait for some additional opportunities and chances. Besides, the ones who do not take a chance, become poor, loose their jobs and become the representatives of the low-class society.

The aspect of turbo-capitalism is spread all over the world, including the United States of America, European countries and the Asian part of the Eurasian continent. The only difference that separates the whole world from the United States, taking into consideration the aspect of turbo-capitalism, is that other countries lack strict rules and legislative basis for its development and control. The author of the book describes the existing problems and the ones that can be a result of the turbo-capitalism.

The last book which presupposes deeper understanding of the research is the Naked Economics: Undressing the Dismal Science. This is the book written by Charles Wheelan, a journalist who made the economic the clearest thing in the world. The author introduces different economic issues and discusses them in an understanding manner appealing to the everyday-life problems every person encounters.

The book consists of articles that are considered to include the information of the 101 lectures on economics. The whole sphere of the economics and markets, governmental funding and the globalizations appears to be very simple and understandable after examining the Naked Economics: Undressing the Dismal Science.

The book gives the answer on the range of questions that are commonly the object of interest. The economic situation of the world influences the economic situation of every country; consequently, every citizen of the country is dependent not only on the financial situation of his/her country but on the global economic situation as well.

Every person encounters some financial problems and tries to solve them. The book written by Charles Wheelan is the guideline for the ordinary people and for scholars; it discusses the financial aspects of our life. The most important issues cannot be understood and used without this book. The author uses clear and bright examples to illustrate the situation in the global market and in the Federal Reserve System of the United States of America.

The book is written in a clear manner so that even a person without any prior knowledge of the economics could understand the basic notions. The author does not explain the economic issues, he describe the current economic situation and aspects related to the everyday life financial situations and problems instead.

The Naked Economics: Undressing the Dismal Science represents such issues as power of markets, economics of information, trade and globalization, productivity and human capital, financial markets, the federal reserve, the wealth and poverty of nations as the phases of the economic development. “Employing basic concepts and assumptions, such as choices, incentives, tradeoffs, prices, costs, and the economics of information, Wheelan cuts a large swath contemporary microeconomic and macroeconomic issues, controversies, and fallacies (Bartlett, 385).

The Naked Economics: Undressing the Dismal Science shows the possibility of influence of the economic situation of any place in the world on certain countries and individuals. “The world of high finance is often described as a rich man’s version of Las Vegas-risk, glamour, interesting personalities, and lots of money changing hands” (Wheelman, 123).

The current economic tsunami and views of the current Obama economic strategies

Thus, in the very beginning of the presidential career Barak Obama wanted to join the political, social and economic strategies of the two parties. The Democratic wish list included three major issues developed by the newly elected president: alternative energy investment, more health care spending as well as massive infrastructure spending.

As the political programs and strategies of both parties had to be drawn into cooperation and legislative negotiations in order to make some contribution into the current development of the country, the Republicans introduced tax cuts for individuals and business. Thereby, the administration of Obama tries to combine the strategies of both parties to avoid discontent public opinion.

Under the global financial crisis the President Obama claims it necessary to “create jobs in an economy no longer built on the historical bedrock of manufacturing” (Sheehan, 1). This plan is the part of the Democratic wish list included into the political strategy of the president. Thereby, the massive infrastructure spending (creation of new jobs, development of plans of renewal the financial sector) is one of the ways to use the crisis and to take advantage of competition.

Taking into consideration the major strategies followed by Obama administration, it is reasonable to discuss these plans from the point of view of author having represented their ideas in four books previously discussed. Thus, the alternative energy investment is the principle approved by Thomas L. Friedman, the author of the book Hot, Flat, and Crowded: Why We Need a Green Revolution–and How It Can Renew America. “Destroying a tropical rainforest and other species-rich ecosystems for profit is like burning all the paintings of the Louvre to cook dinner” (Speerstra, 204).

The economic strategies cannot be good or bad under the tension of the unemployment, bankruptcy, homelessness, and a great number of other terrible factors indicating economic decline, which are caused by the current global financial crisis. The current economic tsunami is an inevitable phenomenon, which should be used to change the basis.

Conclusion

Consequently, the changes must affect the number of sectors: the education must be directed on developing technology-related skills, the restructuring and consolidation of financial sector, develop banking regulation. The economic, fiscal and social strategies help to plan the future actions that must be taken in order to lead the country to the prosperity and improve the current situation. Obama and his administration make efforts to make the situation better; the changes have to affect all the spheres of economic, social and political activities. Every member of the society can make his best to support the changes needed for reorganization of the economics and other spheres of the country. The population has to understand that changes are necessary and they will inevitably take place.

Works Cited

Bartlett, Rebecca Ann. Choice’s Outstanding Academic Titles, 1998-2002: Reviews of Scholarly Titles That Every Library Should Own. Chicago: Association of College & Research Libraries, 2003.

Bertram, Geoff. “New Ideas from Dead Economists, an Introduction to Modern Economic Thought.” Economic Record 76 (2000): 312.

Buchholz, Todd G. New Ideas from Dead Economists – An Introduction to Modern Economic Thought. London: Penguin Group, 2007.

Fiksel, Joseph. Design for Environment, Second Edition: A Guide to Sustainable Product Development. McGraw Hill Professional, 2009.

Friedman, Thomas L. Hot, Flat, and Crowded: Why We Need a Green Revolution–and How It Can Renew America. New York: Farrar, Straus and Giroux, 2008.

Kegley, W. Charles, and Gregory A. Raymond. The Global Future: A Brief Introduction to World Politics. Cengage Learning, 2009.

Lamb, John. The Greening of IT: How Companies Can Make a Difference for the Environment. Pearson Education, 2009.

Luttwak, Edward N. Turbo-Capitalism: Winners and Losers in the Global Economy. New York: HarperCollins Publishers Inc., 1999.

Magee, David. Jeff Immelt and the New GE Way: Innovation, Transformation and Winning in the 21st Century. McGraw Hill Professional, 2009.

Mann, Roger. Antimarket economics: blind logic, better science, and the diversity of economic competition. Greenwood Publishing Group, 1996.

Sheehan, Daniel Patrick, and John L. Micek, and Spencer Soper, and Scott Kraus. “Obama at LCCC: Help Coming America, but it Will be Awhile.” 2009. The Morning Call. Web.

Speerstra, Karen. The Green Devotional: Active Prayers for a Healthy Planet. Conari, 2010.

Stoft, Steven. Carbonomics: how to fix the climate and charge it to OPEC. Steven Stoft, 2008.

Wheelman, Charles. Naked Economics: Undressing the Dismal Science. New York: W.W. Norton & Company, 2002.

“Guest Post: An Economic Strategy for Obama.” Real Time Economics. The Wall Street Journal. 2008. Dow Jones & Company, Inc. Web.

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