Jeff Bezos: The Richest Man In The World

        Jeff Bezos - president and founder of Amazon, the world's richest person, and America's 25th-largest land owner was born to a single, 17-year-old mother in 1964 in Albequerque.  He then went on to become CNBC's businessman of the decade and an incredibly influential figure in global and domestic economies, not to mention the head of one of the most profitable corporations in the world.  But how did he do it and what is he doing with his net worth of $123.9 billion dollars today?
       Upon its founding in 1994, Amazon was an online bookstore operated out of his own garage.  The company went public three years later, riding the wave of the newly-founded internet.  He later expanded the company to include other merchandise and goods, where it slowly but surely transformed into the Amazon we know and love.  In 2000, Bezos founded Blue Origin, which promised to put average human beings into space.  Blue Origin, despite not being super widely known, is actually doing quite well with successful flights to and from space holding 'dummy' passengers.  Bezos also acquired The Washington Post in 2013 for a mere $250M (in cash, no less).  Throughout his career, he has acquired many companies and startups in the quest to ever-expand Amazon.  Some notable ones include Whole Foods, Goodreads, Ring(the electronic doorbell company), IMDb, Zappos, Twitch, Audible, and numerous others.
      So what is he doing with all that money? Not paying taxes! And thus getting richer! Amazon payed $0 in federal tax dollars in 2019.  It is estimated that if they did pay taxes, Amazon would pay roughly $6 billion dollars per year.  Which is actually very small, considering the amount they make every year.  This would be the equivalent of the average person paying $475 per year compared to their net worth.  But literally why does anyone need this much money? What can you buy that is worth more than single-handedly ending homelessness in the US, which Bezos could do, by the way.  What could you  have that is worth more than your own humanity?
       I think it's hard to be ethical when you are literally the richest person alive and who has ever lived.  So, personally, I think it's good that no one clapped for him at the Oscars on Sunday because he doesn't deserve it.

Comparing the Asia Financial Crisis and the 2008 Financial Crisis

Comparing the Asia Financial Crisis and the 2008 Financial Crisis


Recently we discussed globalization in class and the 1997 Asia financial crisis. When I learned about how the US government bailed out the countries in economic crisis, I thought of another, more recent, economic crisis that involved government bailouts, the 2008 housing crisis. This made me wonder if these two economic crisis had any similar causes, and if the 2008 crisis could have been predicted by looking at the Asia crisis.
To briefly summarize, the 2008 crisis was caused by banks giving out mortgages to people with bad credit, also known as subprime mortgages in order to build mortgage-backed-security that were in demand as they seemed like a safe investment. However, as subprime lending continued, people started to default on their mortgages, creating a large influx of houses into the market, lowering the value of houses, bankrupting large financial institutions, causing a ripple effect throughout the economic web of liabilities, assets, and risks. What followed was economic recession on a global scale.
It seems that financial crises have similar causes that include risky loans, excessive speculation, and lack of government regulation. Large financial institutions heavily invest into what seems to be stable markets, and are ill prepared for when those markets unexpectedly crashes, forcing them into bankruptcy or government bailouts. Because of globalization, these large institutions have so much influence over the global economy, when they fail, the whole economy goes with them.

We Really Did Shut Up and Dribble Huh

Last week or a few weeks ago (not sure), we talked about globalization and the Asian markets. It reminded me of when I read about Clinton deciding to pursue trade with China in the late 90's early 2000's. Many people were against opening up trade with China because of their Human Right's Violations, and the Tian An Men Square incident happened relatively recently in 1989.

Clinton made the announcement to pursue trade under the reasoning, it will better both America's economy and improve China's situation. "The question is not whether we approve of or disapprove of China's practices. The question is, what's the smartest thing to improve, these practices?" In other words, he thought trade with China would allow American ideals to be adopted in China for China to be more about freedom, liberty, etc.

China joined the WTO in 2001; US businesses started investing in China and China started investing in the US. The NBA was one of these businesses that first opened their markets to China. Basketball was introduced to China in the 1950s; and even though China's communist party banned most foreign sports, basketball became a national sport. 

The 2002 first draft pick for the Houston Rockets was the now-famous Chinese basketball icon, Yao Ming. China had never produced a star player on the NBA level, and Yao Ming made it possible for Chinese people to be involved in the NBA. 200 million Chinese viewers watched Yao Ming's first game against the Lakers in 2003, compared to 9.9 million domestic viewers that watched the 2003 FINALS. 

Yao became the Chinese endorsement model, for Coke, Gatorade, Apple, etc. The Rockets became China's favorite team, simply because Yao was on it. The NBA began sending their players to China on summer tours for marketing and promotions. 

The league's popularity boosted; 490 million Chinese people streamed the NBA finals last year. <---- The entire US population is 330 million.....

Ok, so I know I've just been spewing information, but basically the NBA saw China as a huge market. However, everything was threatened the summer of 2019 when Houston Rockets General Manager Daryl Morey tweeted, "Fight for Freedom, Stand with Hong Kong"

In Chinese people saw this as an act to break up and weaken China. The Chinese Consulate for Houston said that this tweet was an "error" and asked Morey to correct it, which he did. The rest of the summer was damage control for the Rockets. 

The Chinese government cancelled all preseason broadcasted games on national TV, and Tencent suspended their streaming service of the Rockets. In Shanghai, workers tore down ads for upcoming games, people protested the NBA outside the stadiums. Fans even tore up their tickets in support of the Chinese government. 

This may seem like a shock, but hear me out. The Hong Kong thing is definitely a Human Rights issue, but to the Chinese people it is a threat to their sovereignty. No state wants to be split up, and the people don't want to either. It would be the similar to saying, "The Confederate South should be free of the Union's sovereignty" which we didn't and won't allow that. It's a perspective thing.

Even though the NBA technically stood by Morey's tweet of expression, they undercut their words with their actions. You may remember the reporter being shut down by the NBA when asking James Harden and Russell Westbrook what they thought of the tweet.

Other companies have faced the wrath of the Chinese government as well, learning not to cross certain boundaries. Usually these are: Taiwan, Tibet, and Tian An Men ----now Hong Kong as well.

Because China has the population and the ability to withhold access to the consumer market, they have forced the US to bend to their will in order to continue selling goods and services. Doing business in China means following their rules. Clinton's vision was to profit of China's market and hopefully share our democratic ideals with China, but the reality of globalizing has made China import their censorship into America.

One Unintended Benefit of Globalization: No More Dysentery

While we often think of dysentery as something we get from playing "Oregon Trail", it's actually still prevalent to this day. Dysentery is caused by bacteria in your gut, and is most often caused by eating contaminated foods. Most stories of people getting dysentery are from travelers going to India or China where the food safety standards are not as high as the United States. Locals, having built up a resistance to the bacteria, but travelers are especially susceptible. For ordinary people, getting dysentery means missing out on a few days of exciting sightseeing. But what about professional athletes, whose sole purpose in life is to stay as physically fit as they can? The answer, surprisingly, is globalization.

Athletes such as Usain Bolt who want to stay healthy during international visits turn to McDonald's to satisfy their nutritional needs. Unlike hotels or local restaurants, McDonald's sources all of their food from reputable sources as they want to maintain a good public image. That means that the chicken nuggets you get here in America are exactly the same as the ones you would get in China. Usain Bolt, taking advantage of this fact, ate 100 chicken nuggets a day during the 10 days he spent in Beijing for the Olympics. While eating only chicken nuggets might get boring after a meal or two, for some athletes it's an acceptable price to pay.

While having these notable "American" brands does take business from local restaurants and spreads the American way of eating unhealthy foods to other cultures, I still think that the fast food companies' expansion to foreign markets is a benefit. It allows areas with the restaurants to experience economic growth in the form of jobs, skills, and benefits that can boost workers towards a higher economic status. Avoiding the diarrhea is another benefit too, but I don't know many tourists who only eat McDonald's.



https://time.com/3912896/usain-bolt-chicken-mcnuggets-olympics/
https://corporate.mcdonalds.com/corpmcd/scale-for-good/our-food.html
https://business.financialpost.com/opinion/how-greedy-mcdonalds-became-the-most-effective-poverty-fighter-in-the-country

Coronavirus: Global Economic Impacts

When news of the coronavirus outbreak in Wuhan, China, broke out in late December, concerns not only about global health but also about the global economy spread. China has become a crucial part of the global economy as the world’s largest manufacturer and trader, and accounts for about one-sixth of global economic output. However, with the outbreak of the coronavirus, thousands of stores have closed and many companies have either stopped or slowed production of goods in China. Airlines have canceled 25,000 flights to and within China due to ticket sales collapsing, and companies are limiting their employees’ travel to China. Car manufacturing factories are delaying production. MKM Partners predicts that Imax Corp. will lose roughly $200 million in global box office sales in the first quarter if the epidemic continues for more than a few weeks.

Almost twenty years ago, SARS had similar impacts on the global market (China had just joined the WTO), but the economy rebounded rather quickly. However, because international companies have increasingly begun to rely on China as both a major consumer and a major manufacturer, it is predicted that the worldwide impact of this strain of the coronavirus could be bigger than SARS. China’s economic growth is predicted to decrease to 5.6 percent this year from 6.1 percent in 2019, which would reduce economic growth to an annual rate of 2.3 percent. This would be the slowest rate of economic growth since the global financial crisis from 2007 to 2009.

As a response, China’s leaders have proposed plans for the People's Bank of China to introduce a net 150 billion yuan ($21.7 billion) to markets in addition to other measures in an attempt to prevent volatility in financial markets.


Sources:
https://www.bloomberg.com/news/articles/2020-01-27/tracking-the-virus-outbreak-s-impact-on-business-and-travel
https://www.nytimes.com/2020/02/03/business/economy/SARS-coronavirus-economic-impact-china.html
https://www.bloomberg.com/news/articles/2020-02-01/pboc-vows-to-maintain-ample-liquidity-amid-coronavirus-outbreak

$ocial $tatu$

Whether we want to admit it or not, all of us want to fit in to some extent. Especially in high school, when our levels of self-consciousness most likely reach their peak, standing out could be a nightmare. So we follow what everybody else is doing. Think about what is trending right now. Lululemon, HydroFlasks, the famously overpriced Urban Outfitters, Polaroid cameras, Uggs, etc., and these are just the basics. If we follow our impulses to keep up with all of these to "fit in," well...Karen's shirt in the picture above explains social status well: Bling Bling.

But who cares about popularity anyways, right? It's just 4 years of feeling a little like an outcast, wishing you had the courage to walk down the halls confidently. These were my thoughts before I knew that popularity has a long-term effect on people. 

It all starts with the obvious: confidence. Having your peers admire and respect you makes you feel worthy, like what you are doing matters. This confidence then builds up enough for these popular kids to take risks, especially because teens are prone to do so. When they get the result that they want, which is more "fame," this further boosts their ego. The cycle continues on.

All the confidence they built from this cycle is exactly the reason why, according to the National Bureau of Economic Research, people who were popular in high school earn 2% higher wages than those who were not. In my theory, people who were popular in high school may be able to take more risks. They can more efficiently judge whether they should take the risk or not because they are used to calculating the likelihood they will successfully pull it off, the magnitude of the effect of the success, and what they would lose if they fail. This may lead to more frequent promotions and overall recognition. 

If we loop this back around to high school, where we established in the beginning that keeping up with trends require a lot. of money, we can make the connection that the rich stay rich. People with money have flashy items that earn at least some recognition at school, which can make them popular. These kids gain confidence throughout high school, which leads to a more successful career.

This doesn't necessarily mean that only popular kids will succeed. The quiet kid sitting next to you in Calculus might be in the process of building her own company that may become the next Apple. We never know. But once again, doing that kind of stuff requires money, too, right?


Sources:
https://www.inc.com/maeghan-ouimet/high-school-popularity-affects-adult-income.html

We Spend How Much?

The average teen spends $2,600 a year. Thats about 52 starbucks coffees or 130 shirt or 43 pairs of shoes. The spending is up about 6% since fall and 1% since last year. After looking at my personal spending habits in class, I realized I spend a lot of money on what I would deem to be a "luxury item." By that I mean things that I do not need, but like to treat myself with. That could be anything from a boba tea or a manicure. I wanted to research the breakdown of how our generation spends.

Gender plays a tremendous role in how we spend money. Studies have found that male teenagers spend about 23% on food and 14% on video games. Thinking about it, as teenagers my parents did not have the ability to purchase the new Call of Duty or Grand Theft Auto Game that was released every year. These games and counsels are expensive. Technology plays a huge role in what we as teenagers choose to spend out money on.

Conversely, teen girls were more likely to shop for fashion. About 25% of their money was allotted to clothing - and in particular, shoes. With online shopping and instagram models/advertisements, new clothing items and brands are constantly being shown to teenagers. This constant ability to click a button and have shoes shipped to your front door allows for easy consumption of goods.

We are part of Generation Z - a generation which is estimated to spend a whopping $830 billion a year. But how do we get our money? Only 34% of teens in our generation have a job, compared to almost 60% of teens in 1979. This decrease is fairly large, and can be attributed to our ultra-stressful school schedule. With homework and pressure to participate in various extracurriculars from sports to volunteering, how are teens supposed to add a job on top of that - it is virtually impossible.

With the apparent increase in spending and decrease in teenagers with jobs arises a problem - teenagers are excessively taking money from their parents. There needs to be a way for teenagers to either balance their schoolwork and a job or minimize their spending. I am extremely busy during the school year so my solution is to get a job in the summer and save up for the school year. But, some people travel the whole summer of have an internship. What are some possible solutions for them?


Sources:

https://www.businessinsider.com/generation-z-teen-jobs-2018-5
https://www.valuepenguin.com/news/teen-spending-grows-making-gen-z-economic-force