My Blog

My Final Blog - My Misconceptions

Before this class I had never posted a blog before, for academics or otherwise.  To be honest I did not know much about blogging and the little that I thought that I knew I had gathered that information from movies and conversations with friends.  To me, blogging was nothing more than the pointless, and unimportant, stream of consciousness from an individual who thought that other people have nothing better to do with their time than listening to what the blooger had to eat for dinner that night.  When I read the syllabus for this class I was disappointed to see that I would be responsible for maintaining a weekly blog.  Aside from the fact that I am usually weary of new things in general, give my bad association with blogs I was not looking forward to maintaining one for a class and was dreading the semester.  Even as recent as a few weeks ago I was still complaining, to anyone who would listen, about writing a blog, and was skeptical of its educational effectiveness.

Tonight, however, after looking over the blogs that I have written, I have a real sense of accomplishment.  I regard the class that I am in to be among one of the finest I have been in (more on that point later) and I was able to effectively communicate with them, through a means that was unfamiliar to me.  I am also amazed at the wide range of topics that were discussed in my blogs.  There is everything from the books that were discussed, like The Visible Hand and the Lords of Finance, to the mortgage crisis and French labor laws.  I do not think that I have ever been in a class that has offered a method to discuss such broad issues.  It was also nice to see what my fellow classmates takes were on the direction of the class and to see what they thought of my take.

M second misconception could have been accurate had certain people not been involved.  The Rise of the American Corporation was not exactly a class that I was looking forward to.  I signed up fro the class because it fulfilled certain requirements for me, not for the content.  I was worried that it was going to be a dry course that would not be able to hold my interest past week 3. 

I am happy to admit that this was one of the best classes that I have taken in my graduate career.  While some of the books this semester were difficult to get through, the professor and students in the class more than made of for it.  I applaud my classmates who were more well-rounded and better informed than any class I have had before.  It also helped to have a professor with a sense of humor to get through the duller portions of the material.

A sincere thank you to everyone involved in this class this semester.  It has truly been a pleasure.

Great Time to Buy a House?

I have never been interested in business, historically or otherwise.  This class, however, has certainly broadened my views and made me more aware of what is going on around me.  I would have never learned about French labors laws, for example, had it not been for this class.  My mind would shout down and my eyes would glaze over if I heard a business report or if someone started talking to me about economics.  Now that I a have a better historical basis, at least for the United States, I not only shut down, but I can actively engage myself in the conversation.  Economics are still very political and I refuse to be drawn into a partisan debate, but I have a better understanding of what both sides of the isle are talking about.

 

Recently, my wife and I have decided to buy a home, my blog this week reflects this, as I assure you, that I did not spontaneously adopt a bizarre interest in mortgage rates.  I listened to a blurb on NPR this week where there were several guests that ere debating whether or not this is the right time to buy a home.  While most of the guests did concur that this was a prime time to buy a new home, there were still a vocal minority who insist that unless you are absolutely certain that your financial future is 100% secure, you should wait, even with the $8,000 tax credit. 

 

It always amazes me that one set of data can lead to two different conclusions.  The first article I read talked about how tough times are in the housing industry and unemployment is negatively affecting the market.  The more people who cannot work, the more people will end up foreclosing on their homes, due to the fact that they can no longer make the payments.  However, that is only half of the equation.  The other part is that if people are not making money, and do not already own a home, then the rate of houses bought also decreases.  

 

The second article that I read, however, had a much more up beat tone to it.  This article discussed how, right now fixed mortgage rates are cheaper than ever before.  It said that now was the perfect time to buy, and with foreclosures up, prices down and mortgage rates way down, that should help the economy.  So with two drastically different views, who are we supposed to believe? 

 

 

Foreclosure, Delinquency Rates Spike Amid Growing Unemployment

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/19/AR2009111902097.html?hpid=moreheadlines

 

Fixed Mortgages Cheaper Than Ever

http://www.bankaholic.com/fixed-rate-mortgages-cheaper-than-ever/

End of the Dollar, Right Around the Corner?

Previous to our last class I had not heard much in the way of deficit spending and the national debt.  Since that class, I do not know if it because I am listening for it more, or because it is showing up in the media more often, I have seen and heard nothing but news about this topic.  In fact, the very next day (Friday of last week) I went down to D.C., to do some research for a paper for my other class, and saw a massive mural/billboard in the Metro station that mentioned something about how common people had the responsibility to save our country from over spending.

 

There are, as I understand it, two sides to this argument.  There are those who think that the amount of spending that the United States is currently spending is detrimental to the balancing of the budget, will increase our national debt and will lead to further inflation and weakening of the United States dollar.  While I do not subscribe wholly to this theory, there is certainly some truth to it.  The other side of the argument is that in the difficult economic times that we are in right now, it is essential to get the economy stimulated, just to get it going to the right direction.  Once this process has begun, government spending can decrease and strength will return to the American dollar.

 

The website that I visited this week discussed what Treasury Secretary, Timothy Geithner, was saying to the people in Asian countries.  He reassured them that "the Obama administration was committed to a strong dollar and to actions aimed at bolstering its value."  It would be easy to dismiss this comment as another politician telling people want they want to hear.  Asian countries, particularly China, want to know that the United States dollar is strong as they are the ones holding much of our debt.  I would argue that Geithner is not that good of a politician and with the President's first year in office coming to a close, the American people are going to want to see a palpable change in the economic conditions in this country.  The United Sates has a vested interest in seeing the American dollar gain strength as well.  I want to believe that most Americans understand these economic principles. 

 

Yet, in "Ads provided by Google" (on the very same page) were websites with titles like Death to the U.S. Dollar: 3 Secrets to Protect You in the Dollar's Final Days and The U.S. Dollar Collapse: You Could Loose Everything Tomorrow, Get Ready For Dollar Collapse Now.  I do not know whether to congratulate these people for their con, or hide my head in shame of my fellow Americans who make those sites possible.

 

For more on the article that I read visit:

http://www.nytimes.com/2009/11/13/business/economy/13geithner.html?_r=1&ref=business

Do We Believe the Jobs Hype?

I read an article this week about Steve Jobs being crowned "CEO of the Decade" by Fortune 500. My gut reaction was that of surprise and disgust. After the initial shock wore off I tried to analyse why I felt the way that I did towards Jobs. Was it because I have a natural resentment toward Macs? Was it because he was one of the few people who was successful in these tough economic times? The conclusion that I cam to is that it is natural for "captains of industry", and Jobs was quoted as being a modern rendition of this Gilded Age figure, to be both heralded and despised in their own time.

People talk now about the brillance of Rockafeller, Ford and Carnegie. They are most commonly thought of as self-made men who knew what was needed to be successful in the business world and let nothing get in the way of their goals. We do not often hear about the, at times, deplorable conditions their workers were subjected to, or the massive chasm that existed in those times between the high and low classes. Most often we hear about how much wealth they were able to accumulate.  During their own times, however, they were looked upon as idols by the wealthy and devils by the poor. 

Personally I think that it will be the same with Steven Jobs. In fifty years no one will hear about his liver transplant, or about how he left his company and then came back. They will probably not read about his anti-corporate attire or his uniquie quirks. They will know, however, that his net worth exceeded 5 billion dollars, and that is just counting his investments in Disney and Apple. People will undoubtadly hear how the "self-made man" started this obscure business in his garage and eventually became the most successful CEO from 2000-2010.

If you did not see the article and would like to read it I have provided the link below:

http://money.cnn.com/2009/11/04/technology/steve_jobs_ceo_decade.fortune/index.htm

Lazy French.

After our discussion of the Wal-Mart in Germany disaster I decided to go online and see what I could find on other European countries were offering in terms of differences between how employees work in that country compared to the United States.  The country that was most intriguing to me was France.  Aside from Britain, whose labor laws I was already somewhat familiar with, France would probably be the closest to the United States in terms of working terms.  The French and American systems are different in two major areas: hours per week and vacation time.  One of the articles below cites how lazy many French employees are, but I do not see much of a difference between them and the United States.  The rule everywhere seems to be, only work as long as you have to.

 

With regards to the 35 hour work week, France recently passed a law that gave employers the right to have their employees work more than 35 hours.  According to the report, however, most employers decided not to take advantage of the opportunity to have their workers work longer days and the ones who have opted for longer work days have been met with strong resistance.

 

All of that being said, I can understand the 35 hour work week, it is, after all, only 1 hour less per day than the standard 40 hour work week.  What I cannot understand is the amount of vacation time the French get.  At my current job I get 15 days of paid vacation.  French law guarantees their people five weeks of vacation, some people get more.  One of the articles I read stated that there are certain months where nearly the entire city of Paris shuts down, which hinders their economy at a time when many tourists would be spending money at their shops.    

 

This week I also had the opportunity to speak with a friend of mine who had spent several years working in a town near Madrid, Spain.  He related to me that a typical "work" day started around 9 a.m.  Naturally everyone showed up around 10 a.m.  At about 10:15 a.m. it was time for tea.  At 11 a.m. everyone would break for lunch.  Lunch lasts longer in Spain (it is more like our dinner) and everyone rolls back in around 1:30 or 2 p.m.  At around 3 p.m. you take your siesta (nap) and then leave work around 4:30 p.m.

 

He also mentioned that some European companies have increased the hours per week required and productivity has gone down.  He claims that workers are not as effective because they think that they have more time to get the same amount of work done, so they put it off.  Also suicide rates have increased in these countries that do not even have 40 work weeks and still have far more vacation time than Americans.

 

Two of the websites that I looked at in regards to France:

 

Interesting

http://www.cbsnews.com/stories/2005/06/27/60II/main704571.shtml

 

Most Recent

http://www.time.com/time/world/article/0,8599,1873245,00.html

Death of Salesmanship?

I had the pleasure of being the presenter/facilitator of this week’s reading, Birth of a Salesmen: The Transformation of Selling in America.  The reading this week was different from a majority of the readings that we have discussed this far in a number of ways.  The first difference that I noticed was the time frame.  The author of Birth of a Salesman covered nearly the entire history of the United States, in regards to the development of the salesman.  This book also differed in its approach.  In some respects it was Great Man history.  Many of the biographical examples used cited captains of industry.  At the same time Friedman also discussed the “hawkers and walkers” and the drummers with equal ease.

 

One aspect about the book, that was raised near the end, was whether or not salesmanship will eventually disappear.  Friedman contests that this claim has been made since 1916.  I am of the opinion that as long as there are humans there will be the need of salesmanship, though its necessity has decreased over the years.

 

With the advent of the internet and with e-buying on the rise there are ways to completely avoid a salesperson, though you will be more prone to advertising.  There are people, however, who do not like the absence of a salesperson.  Some actually enjoy having someone there to assist you if you require help.  The bottom line is that if you are a “people person” you generally like to have a salesperson present.  If you do not enjoy having someone assist you with you shopping needs, you will probably feel more comfortable making your purchases over the internet.  

Big Banks Making a Comeback

On my way into work this morning I was listening to NPR (to view a condensed version of the program I heard visit: http://www.npr.org/blogs/money/2009/10/big_banks_reporting_profits_in.html) and I heard two surprising, at least to me, statements.  The first was that many big banking institutions had reported profits in the third quarter, which also has something to do with the recent turn around of the stock exchange.  This surprised me, however, because normally when economic conditions approve I believed that the unemployment rate would come down.  On this same program, however, I heard that the unemployment rate is expected to rise and will probably exceed 10% before it starts to decrease.  Unemployment, however, is logically one of the last aspects to improve as the businesses cannot, and do not need to, hire more employees if they are not turning a profit.

 

The truly surprising information was how these banks were making money.  I could not understand how banks would be able to make money seeing as how they are making it extremely difficult to get a loan right now.  The radio host explained that banks are not lending like they have been so they have turned to investing to make profits.  As smaller banks do not have the capital to make these investments they are continuing to fail.  The government made the claim, which was probably accurate, that if the larger banks were to fall, it would be catastrophic for the United States economy.  What happens when many smaller banks fail?  Does it  provide more stress or stability for the U.S. economy?  Should a bail out be contemplated for smaller banking institutions as well?

 

This point leads to the final thought I had for my blog this week.  It seems like the first part of the “save Wallstreet to save Main street” plan has worked.  The government was able to, somewhat successfully, bail out major financial institutions and not only kept them afloat, but now some of them are even in the black.  The problem is that none of Wallstreet’s success has “tricked down” to Main street yet.  Meanwhile the Whitehouse wants to push through a bill that will offer universal health care coverage.  I am probably one of the more partisan neutral people you will meet, but how are we going to get tax payers to pay for this when they have no jobs? 

Week 5

I first saw the Hudsucker Proxy about 5 or 6 years ago and I enjoyed it for its sharp dialogue and comedic chemistry between Tim Robins and Paul Newman.  When I decided to watch it again, this time paying close attention to how this film could be related to this class, I was surprised with some of the aspects that I found.  Before I get into the symbolism of this movie and how there are certain aspects that might be analogous to the broad category of “Business History”, I should point out that these are possibilities and conjectures and should not be confused with what the Coen bothers’ intent was.  On the other hand, if you are in the O’Malley camp, intent is not important anyway.  While intent may not be important, I did find an unverified comment on Wikipedia (gasp) where a reporter had made a comment that the characters represented capitalism versus labour economics.  Joel Coen replied, “Maybe the characters do embody those grand themes you mentioned, but that question is independent of whether or not we’re interested in them – and we’re not.”  Translation:  Sometimes ruby slippers are just ruby slippers.

 

One aspect that I thought related directly to this class was the battle of the educated, yet untested, trying to break into the business world.  The inexperienced and naïve Norville Barnes takes a basement mail-room job at a huge (we know that the company is large because it has 44 floors [45 counting the mezzanine]) New York company.  It is interesting because although Norville Barnes graduated at the top of his class at Muncie Business College, none of that helped him get a job, because that all required previous experience.  The only reason that Barnes gets elevated from the mail-room is because the Vice President of Hudsucker Industries think he is unintelligent and wants to depress the stock. 

 

Another important feature that struck me, while watching this movie was that the corporation was presented in a modern light even though it was loosely based on the business world in 1958.  I am not convinced that people believed the corporation to be the heartless, soul-sucking machine that many people associate with it today.  I would actually be interested in finding out when exactly the negative connotation was connected with the corporation.      

 

Week 4

Out of all of the readings for this week I found the Common-Place posting the most interesting and the on that I decide to make the focus of my blog this week.  In reading this posting I thought that this unusual form of chrometophobia was key for me to more fully understand the discussion we had two weeks ago when we talked about the resistance to leave the gold standard in Liaquat’s The Lords of Finance.  The reason why this week’s reading was beneficial, was because it filled in some holes left by Liaquat. 

Liaquat asserted, for example that one reason that there was a general fear of leaving he gold standard behind was because there were still many precious metallic coins in circulation.  In fact it was stated that over forty percent of the transactions that occurred in the United States in 1912 were with these coins.  The gold standard was tangible, safe and a device which had been used to successfully keep inflation in check.   That seemed logical but the amount of fear that was felt about dismissing the gold standard seemed out of balance with the reasoning given by Liaquat.

The possible reason that I felt a little uncomfortable with Liaquat’s explanation might be because it was incomplete.  According to O’Malley, there were intense psychological reasons, that had nothing to do with economics, that added to their fear of discontinuing the gold standard.  O’Malley made it sound as though they people in the late 1800s/early 1900s thought that if the no longer used the gold standard the social fabric of their lives would be ripped to shreds,  particularly the father’s inability to provide for his family and the United States slipping in international morality.  When added with Liaquat’s reasoning, O’Malley’s article put the gold standard crisis in a more clear perspective from someone looking through 20^th century lenses.

I was curious what would come up if I Google search “fear of paper money”.  While quite a few sites came up about how to deal with irrational fears, one site was particularly interesting and relevant to what we have been discussing in class and although this is not a class in British economic history, it does show how people who are in tough economic times still tend to gravitate to gold to ease their fears.  Even now, after the gold standard has been eliminated, we are still using gold as an economic security blanket.  If you are interested in reading more about how the British are looking to gold as their safety net I have provided the site below.

http://www.thisismoney.co.uk/investing/article.html?in_article_id=491220&in_page_id=166

Week 3

The book for this week, The Visible Hand: The Managerial Revolution in American Business, was written in a distinctly different manner than last week’s book.  This week the material felt more historically grounded and I felt more comfortable reading it, though parts of the book were difficult for me to grasp, not having a background in economics.  While the biographical book of last week was easier, conventionally, to read and probably appeals to a much wider audience than does Chandler’s book, I have become accustomed to reading certain kinds of history books and The Visible Hand fit that mold better.

 

The differences between the two books were vast.  While the author of last week’s book decided to write his book using the historical ‘great man/woman’ theory, this week’s selection, while it certainly discussed important players of the time, was more concerned with the general trend of the family/bank owned business turning toward the manager based business.  While their arguments were not contradictory, they were not entirely related either.  As they were not discussing the same time period, however, this is not entirely unexpected.

 

The aspect about this class that I am enjoying is the amount of knowledge that I feel I am gaining.  The probable cause for this is because I had so little knowledge of economics before.  This has been a mixed blessing because while I feel as though I am learning a ton, I also feel that I do not already know enough to fully participate.  This week's book, for example, discussed the "unseen hand" of the marketplace.  I think that if I would have helped me understand the reverse to that theory.  Though it was not really a reverse theory just a theory of how the "invisible hand" market evolved.