AOL Plans on Cutting One-Third of Its Workforce

This article talks about AOLs, a large internet media company, plans for the future. Specifically, it is planning on letting go of one third of its workforce, about 2,300 workers, in order to cut down its costs. The company estimated that they will be able to save an estimated 300 million dollars anually, but they will lose 200 million in the first half of next year.

This will be highly damaging for the already suffering economy for several reasons. First, the layed off workers will add on to the already extremely high unemployment rate of the United States. Second, since more people are without jobs, there are less consumers on the market. So, there will be a further decrease in expenditure, which will lower the United States GDP.

http://money.cnn.com/2009/11/19/technology/aol_job_cuts/index.htm

U.S. Gas prices Drop as Drivers Cut Back

This article basically talks about the currently dropping oil prices in the Unites States. With the badly damaged economy, consumers are now trying to save money by either not driving at all, and using substitutes such as trains and buses, or by simply decreasing their driving, which consequently drops their expenditure on oil. Furthermore, the dangerously high unemployment rate only further decreases the demand for oil, hence causing the price decrease of oil in U.S.

However, when the refiners cut their production of oil, they might be cutting some of their costs, but they are also hurting themselves in the long run. This is because by decreasing oil production, the refiners have to decrease their working force. This only causes further unemployment in the United States, wich means that more consumers will neglect the consumption of oil. This would mean that the oil prices would have to be dropped even further, causing a further decrease in the working force of the refiners. Overall, this chain reaction, or a cycle, will only further damage the U.S. economy.

http://money.cnn.com/2009/11/22/news/economy/dberg_gas_prices/index.htm

Nuclear Renaissance… Not Dead Yet.

This article basically talks about how the idea of building many power plants for energy usage is actually not dead, but on “life support”. Building these plants was a huge plan and a realistic idea a few years back. However, the many combinations of challenging events, such as the diminished economy and the democrats winning the election lead to this idea not being actually implemented. 

 

However, this idea is making a definite comeback, because as the greenhouse gas bill keeps increasing, the billions of dollars of the tax payers money will be used to construct these power plants. Many experts believe that this is the best course to take, as this will create a dependable and a cheaper source of energy for the people.

Not surprisingly, there are many critics who are against this idea. Their main argument is that it will create a more dangerous environment for the nation, and it is not the most efficient way to use the countries money.

http://money.cnn.com/2009/11/02/news/economy/nuclear_renaissance/index.htm?postversion=2009110217

 

Advantages and Disadvantages of Protectionism

Strengths of Protectionism

– One strengh of protectionism is that it keeps the domestic economy flowing. Since there is a decrease in imports, domestic firms have less competion, and so are able to continue.

– The domestic economy also strengthens, because the unimployment rate will be minimal. This is because the domestic firms are able to produce and sell more goods with a lot less difficulty, giving firms less incentive to decrease its cost by decreasing its work force. The people with jobs will keep consuming, allowing a flow of the economy.

–  Protectionism allows the green, fledgling firms to function and develop at a decent rate, because these firms are not pressured by the foreign, more expirienced firms. The fresh firms can growuntil they themselves are able to complete in international markets, promising positive aspects for the domestic conomy in the future.

– Protectionism also prevents dumping. This is where foreign, grand economies enter an economy and sell their goods at a price lower than the costs of production. Consequently, the consumers of that specific economy are spending more, than the consumers in the overseas areas.

 

Weakness of Protectionism

– There are also weaknesses in using the system of protectionism. For example,  protectionism can cause a retaqliation reaction from other countries, ruining the relationship of the two nations. This is a major issue right now between the United States and China. U.S. put restricitons on the Chinese tires, so China retaliated by putting up barriers against different U.S. goods, such us their chicken. This hostility decreases the specialization level of the two nations, harming their economy. 

 

– Also, protectionism prevents nations from maximizing their specialization level, using up factors of production moronically inneficiently.