Will Falling Oil Prices Stimulate US Growth?

Over 75% of economists said their sector or company will feel the consequences of the petroleum cost fall, with 18% anticipating a negative impact, and 57% expecting an optimistic impact, based on a survey in the National Association for Business Economics Monday released.

“By a three-to-one ratio, it is favorable,” said James Diffley, a senior manager at IHS Economics as well as the survey’s chairman. “The 18% though signify those businesses that benefit directly from petroleum and gasoline.

Economical fuel is anticipated to provide a boost in 2013 to the market as consumers turn about and spend what they are saving in the pump. Gasoline costs have dropped to close to $2 a gallon, and therefore are poised to drop below that, among the speediest declines.

But it is crucial to remember that some of the additional stimulation may be taken away, Mr. Diffley said, as petroleum and gasoline companies scale back investment and development. Other occupations will suffer changes in the supply chain for pipe fitters and tool makers, as just one example.  Other reports are difficult to assess simply because of the problems in assessing if they are genuine, many digital businesses for instance – especially those which hide their identity with fake details – like here.

“That takes off several tenths of the percentage point on the increase the market could have gotten,” he said.

Economists reported enhancing conditions at their companies in the fourth quarter.  These

NABE said only rising prices were reported by 16%, compared with 25% in the July and October surveys. And 65% said they anticipate no change in the costs their companies will charge in the first quarter.

And more than half said economists expect salaries and wages to rise in the following three months, compared with.  Sales increase improved somewhat, with 54% of economists reporting increasing sales compared with.

Ninety three economists-who work for private sector companies or industry trade groups-reacted to the survey, that was conducted from Dec. 18 through Jan. 8.

Additional Reading

The Growth of Economic Inequalities in the USA

A new year is upon us, and there are numerous stories of economic recovery across the world.  However beyond basic growth rates, there is another measure which often reflects more about people’s day to day lives.  I’m referring to wealth inequality and in the USA, it often feels more like the great depression rather than a booming new decade.

The depression of course took place in the 1920s and in those times, as usual the wealthy were pretty much shielded from the worse effects.  In fact during that decade, the wealthiest 10% of the population owned about 84% of the total wealth.  The situation evened out over the next few decades with that figure declining before starting to rise again in the 1980s.  However we’re now reaching levels that are very similar to those of the 1920s with the majority of US wealth held by a small proportion of it’s citizens.


The statistics are now more accurate so in some senses a direct comparison is not always completely relevant.   However the overall result is the same, the level of wealth inequality in the US is extremely high and only heading in one direction.  You can see some aspects if you watch news and documentaries on the local media.  It’s certainly interesting to view the different perspectives – for US readers try watching the local news from the UK – you can use this, or vice versa for European readers.

Fortunately when these inequalities are combined with a growing economy, the effects seem less severe.  The US is doing pretty well, with unemployment heading to a new 6 year low and the job market consistently expanding.  However when you realise that the richest 0.1 % control as much wealth  as the poorest 90% you realise this is not a fair and equal society.

The rich are in fact getting even richer, while the poorer sections of society are increasingly stepping into levels of significant debt in order to simply survive.  Real incomes are growing, but at a much higher rate for the wealthy than the poorer levels.  In fact with under 1% income growth, it’s not getting much easier for those at the wrong end of the income ladder.

Of course capitalism has always produced such inequalities, but the argument goes that the growth in income actually is down to new businesses and opportunities for all.  However the studies suggest that the growth in wealth is not coming largely from entrepreneurial spirit but merely reflects the fact that the wealth is held in shares and bonds which naturally are worth more as the economy recovers.  Unfortunately this is unlikely to help bring many benefits to society at large, it will just make the rich, well richer!

 Further Reading.

Gun crime in the USA…

Once again with recent events the problem of gun crime in the United States has been highlighted to people around the world. The shootings in Connecticut have once again highlighted the issue of what should be done to prevent such tragedies in the country.

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While many point towards a blanket ban on firearms, it appears that the President pushing his vice-president Joe Biden to look in to the issue means that he will definitely be doing something to change the way the country looks at weapons in the coming weeks.

The way in which guns are enshrined in the constitution of the country makes it very unlikely that a ban will be enforced, however rules on mental health checks and the strength of the firearms seem likely.

Recently The Best Question asked if President Obama could make any dent in US gun crime. With many people around the world believing that this is unlikely, it would seem that the atrocities of the recent shootings in Connecticut are here to stay. While the President may be able to reduce the caliber of weapons available to citizens of the USA, whether this will cause a significant change in the amount of shootings seen on American soil remains to be seen. However, as a population, we should hope that it does.

Does peace stand a chance in the Middle-East?

The Middle-East has long been a problem area for the West as they look to spread their liberal ideals around the globe. Over recent years we’ve seen uprisings in Libya, Egypt and a number of other countries who have ousted their leaders in a bid to earn themselves more freedom. However, it is unlikely that these states will now turn to the peace and democratic ideals that the USA and the Western world would like to see.

A recent post from how to get an American IP address  on the impact of the USA Presidential Election and the effects it could have on the Middle East, outlined how the election of Romney would have been bad for the region, however, with the current troubles rising up between Israel and Palestine, it looks unlikely that even President Obama will be able to stop the issues of the Middle-East from getting worse.

With nuclear proliferation around the world getting worse and worse, many will have their eyes on Iran and North Korea who are seen as threats to the West and the free-world as they continue with the uranium-enrichment programmes.

The USA’s history of interventionism looks as though it is unlikely to continue against nations who have an arsenal of weapons that are capable of wiping out half of the USA with the press of a single button. It would be foolish for any president to think that entering a country with ground troops is a good idea when a rocket attack on home soil could kill almost all of the US’ population.

While many may have thought that the uprisings in the Arab Spring may lead to peace in the region, it’s now looking unlikely that this will come about. Instead, new questions of the issues in the Middle-East look to plague Obama’s second term in the White House.