In all honesty, this week’s article was supposed to be about the FinCEN files and the impact of discovering that billions of dollars have been laundered by large financial giants since the early 2000s.
But I couldn’t bring myself to write it. And then I thought long and hard to myself: about what I did want to write.
Firstly, reader, I ask you how you are. Are you safe? Are you happy? Are you in a good place in life?
Or do you feel alone? Adrift in times of confusion, aloof in times of duress.
I guess we’re all alone, aren’t we? I think we’ve forgotten how much interactions shape our lives, how much interactions have become a part of who we are. I think we’ve forgotten how much we rely on each other, as a community that thrives and grows as one. We breathe as one, laugh as one. We’re alive as one. Well… at least we were.
And I miss it. The sound of full playgrounds, children, and laughter. The sound of bustling classrooms and hallways, the sound of shoes on tile. The sound of voices and heated discussion.
Quarantine has dragged on for 6 months, and as each month passes it feels as though time is turning into molasses. Time seems to stretch into forever and every day has somehow turned into an unidentifiable pattern of something that is much of the same.
Secondly, reader, I hope you are safe. I hope this virus has not disrupted your life (and if it has, I can only pray that it will get better). I hope that tomorrow will be a better day. I hope that the elected officials of the United States make better decisions and that this year-long torment ends.
I want to go back to the way things used to be, picnicking with friends on the glade or participating in Dandiya and Diwali celebrations on campus. As a senior, I realise my time at Cal is coming to an end, and while I choose not to think about it, the little voice at the back of my head nags me that these moments are fleeting, this time is wasted and life is too short. After my three odd years here, I know that I will miss it. Miss north Berkeley and farmer’s markets on the weekends. The traffic and bad roads. The views of the Golden Gate Bridge. I will miss the people I’ve met (and the people I haven’t). I will miss the conversations that have changed my life and my perspective. But mostly I will miss who I am (or was? Am I the same?). I will miss the young, curious, inquisitive mind, looking to learn. I will miss the frustration and anger and the growth as tough classes gradually get easier (and I grow a year older).
But reader, as was once said in the Lord of the Rings:
“I wish it need not have happened in my time,” said Frodo.
“So do I,” said Gandalf, “and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.”
JRR Tolkien, Lord of the Rings
And those are the words that I chose to live my life by. Not out of choice but out of necessity of circumstance. I can’t control what isn’t in my hands, and perhaps it’s time to let go, if just a little. Of things beyond my control, and things beyond my capabilities. Tomorrow is a new day but today, for the moment, I will cherish what I have.
Lately, amongst the throes of social distancing, voter fraud, and mail-in ballots, some certain familiar shorts-clad people have taken center stage: the United States Postal Service.
The USPS has been the center of heated discussion these past few months, with the looming questions of voting during a pandemic and having a socially-distanced election, especially with concerns of funding and voter fraud. The President, in particular, verbalized some of these concerns by threatening to cut funding from the USPS earlier this year, made even more complicated by Postmaster General Louis DeJoy, who just so happens to be a major Trump donor with strong ties to the Republican party, and his recent efforts to cut costs before the end of USPS’ fiscal year on September 30. Additionally, the USPS just announced major changes in its leadership, which could mean delays of paychecks, medicine deliveries, and of course, mail-in ballots for voters, according to House Speaker Nancy Pelosi and Senate Minority Leader Charles Schumer in a letter sent to DeJoy.
We’ve been hearing a lot about how USPS is on the brink of going under, but it’s important to recognize that there’s more to the story. DeJoy claims to put forward these changes in order to reduce costs and help the USPS “capture new revenue”, even though the USPS doesn’t operate for profit. Additionally, Trump claims that Congress will need to give $25 billion in order to build up the USPS again, which is proven to be untrue. One thing we need to ask is, does the USPS even need more money?
Earlier this year it was said that the USPS would run out of money by late September, but with the new surge of pandemic-related shipping, that date has been rolled back to March 2021. Still, in this era of digital ordering and big competitors, it’s no secret that the USPS has to put up a fight to keep up. Though Amazon and FedEx are both competition and colleagues of the USPS and each other, both are growing at a pace where soon they might not need the USPS’s infrastructure anymore. This makes their current frenemy status a little awkward, considering they’re the USPS’s biggest source of revenue.
However, what critics are worried about is that throwing a fat blank check at the USPS won’t help. At the moment, the USPS’s main method for survival has been to slow their roll and close down certain boxes and stations to not lose any more money. Instead, the Congressional measures and the motions from DeJoy require them to continue delivering on days when they won’t have business, keep open underutilized offices, and refrain from raising prices to support themselves, all while cutting down on overtime and benefits. In short, by not allowing them to cut down, they’re forcing the USPS to steadily bleed out by performing as if nothing’s happening, which can cause some serious damage.
These changes will, of course, influence voting. If the USPS is forced to be more inefficient, their capacity to deal with the surge of ballots is weakened and mail-in voting could be delayed, which could absolutely affect the outcome of the upcoming election. We’re on the verge of having an election unlike any other in American history, with each state taking some stance on normalizing a postal vote.
One big concern shared by both parties is the opportunity for voter fraud. As we already know, mail-in ballots slow down the election process by a lot of time, which is generally a source of unease, especially in such a charged election. Additionally, there are a handful of ways to have your ballot not count, including signs of it being wet, or forgetting a signature on the envelope; election officials expressed that so far nearly 20% of all mail-in votes had to be discarded for similar reasons, and according to an analysis by NPR, nearly 550,000 votes were discarded in this year’s presidential primaries. In September, the U.S. Department of Justice shared an instance where nine military votes were discarded, seven of which were cast for Trump, and while there were no signs of the discards being intentional, this example has been referenced plenty in the argument against the validity and integrity of mail-in voting.
Yet, many studies show that voter fraud occurrences are remarkably low, perhaps because of this rigorous standard. According to a study by the Brennan Center for Justice conducted in 2017, the rate of voting fraud overall in the US is between 0.00004% and 0.0009%. Similar studies show only four instances of official voter fraud in 2016, and very low numbers overall in the history of mail-in voting.
However, as mentioned earlier, we’re in unprecedented times, and postal voting of this volume has never happened before. There have been instances of voter tampering already, involving misleading ballot boxes, isolated cases of fraud like the Republican candidate tampered with voting papers in the 2018 North Carolina primary, and cases from New York and New Jersey earlier this year eventually leading to two Democratic councilors being charged for alleged fraud after a post box was found stuffed with hundreds of ballots. So, while instances are low, they’re certainly not impossible, which can be cause for plenty of concern.
Still, there are safeguards and provisions in place to prevent people from stealing or impersonating other votes, including required signatures on envelopes and checking that the ballots came from your registered address, which are implemented for all postal votes, absentee or not. With all this in mind, the least we can do is make sure that our vote can count.
These times are confusing, but there are a few measures to take to ensure a smooth voting experience. If you are eligible to vote, please be sure to double-check the last day for you to register (October 19 in California) and mail in your ballot. Also, here are some ways to make sure your vote gets counted. Go out there and vote – not even Dursley can stop you!
You are not alone in these times. The times when the world closes around, the wind seems cold and aloof, the sky is quiet and the earth so still.
You are not alone in these times. The times when the voices of people shouting raise louder and louder, demanding to be heard as the silence of their oppressors becomes deafening, the fires lick higher and higher, a dangerous red, a beautiful red, the ring of a siren screeches farther and farther as hospitals fill and uncertainty lingers caressing us as she passes. Life has become a question. Questions of who, what, when. Questions of where, why, how.
You are not alone in these times. The times when waking up has become a struggle, a question of what each day of new reality will bring. When each night sheds a shroud, a cover, a blanket of broken spirits, and quelled rebellions. A peoples broken, a prayer unheard.
There’s a song in the wind. It’s singing to you (don’t you hear). Singing of better times, different times. We will be eternal, the voice says. Cherished, held, loved. We are no longer silent observers of fate, unrestrained unbridled unchecked.
It is in each other we will find our peace, our quiet, our homes. It is in each other we will find our voices. It is in the small actions of kindness, the unsung acts of courage, the silent gestures of love that we remember the resilience of our kind.
As we plunge into chaos, we question what it means to be human. What it means to be a human. The human condition, afflicted with conflict, rage and greed. We suffer, imperfect and flawed, unlike the heroes of our myths, the gods in our religions. We are petty and jealous, selfish and cruel. We are not beautiful. Not the beautiful elves of Tolkien, nor the mermaids of Andersen. We fight, we fall, we break. And like all else on this gracious Earth, we die.
We are not permanent.
And yet our spirit lives on. Lives on to tell tales of the past, to remind us of our histories and who we are. Anthropologist Margaret Mead once said that civilization cannot be determined by buried vases, pots, or mosaics, but rather by the number of healed bones (thighs, arms, ribs) found in skeletal remains. If we were wild animals, our packs would have left us to die, weak and frail. And so we must perhaps redefine the human condition, as one of love and support, and unbridled affection. Of listening and encouraging, and furthering the conversation on topics we hesitate to vocalize. In the words of Margaret Mead, “Helping someone else through difficulty is where civilization starts. Never doubt that a small group of thoughtful, committed citizens can change the world; for, indeed, that’s all who ever have.”
We have won before. We will win again.
Listen and you will hear: The people are speaking, the winds are shifting There’s a voice in the air (don’t you hear), and she will not be silenced.
So I think we can all agree 2020 is a wild ride so far. Over my past three years at Cal, just about every semester (or at least every Fall semester) has had at least some sort of educational disruption: in Fall 2017 Milo Yiannopoulos came to speak, in Fall 2018 campus closed when air quality index in the bay area became one of the most hazardous in the world, Fall 2019 PG&E ruled most of the bay area with an iron fist, but this semester, to use my favorite zoomer slang, hits different. Every single day there’s a new development either on the UC Berkeley-specific or national/international stage and, at the risk of sounding a bit dramatic, it’s as if every moment is going to be the answer to some future history or public health exam about how a pandemic should be handled. That being said, I find myself also wanting to be cautious in adopting this mentality, after all, in some ways, aren’t we always living what will one day be history?
The phrase “historical precedent” and other similar ones have been used quite liberally when it comes to reporting on both the actual spread and social/financial consequences of COVID-19. In a highlight of the CDC’s response on their website, the CDC refers to the U.S. government’s steps in regards to travel as “unprecedented” and the World Health Organization (WHO) recently put out a news release titled, “WHO, UN Foundation and partners launch first-of-its-kind COVID-19 Solidarity Response Fund”. On the other hand, about the virus itself, Kyle Harper says in a Time article, “The virus is novel, but the pattern is old. As we encroach on nature, and expand toward eight billion, the pattern will continue to repeat itself. It is the plague of our success as a species.” But either way, the thing is, I’m a 20 year-old living in a 2020 world. Literally everything lacks a historical precedent yet is somehow a part of some larger human pattern. I mean, in the grand scheme of things, I may as well have been born yesterday. Don’t get me wrong I’m not trying to call fake news on any experts describing this situation as a “historical precedent” because, in a spoiler for the rest of the article, I do believe them, but being the pedantic person I am, there are just a lot of clarifications I would like to have.
Exactly which aspects of the response are on a scale never-before-seen?
Are both government and social/private responses approximately equal in their lack of precedence?
What about the virus itself, it is of course a “novel coronavirus”, but to what extent is its spread and fatality rate novel in layman’s terms?
And finally: just how unprecedented will the long-term consequences be?
When it comes to a single article, a meaningful answer to all these questions is not exactly the length of a blog post, but especially as the first 3 questions are those that are most likely to determine how the last one will play out, the rest of this article will focus on the currently predicted consequences why exactly, as the title suggests, this historically unprecedented global crisis has created a deeply uncertain future.
For any reasons, it is that last and most unanswerable question in which I am most interested. Back in highschool, before I even knew too much about what a recession or a financial crisis was, I used to think, well at least I should be graduating university just when the U.S. is “recovered” from recession. Honestly, I didn’t totally understand what that meant, but I knew that recession meant it would be harder to find work and get into a career upon graduation. At least that’s what all the adults in my life talked about. Now, from the obviously all-knowing perspective I have as a third year university student, I’m definitely still concerned about it. There is so much research about the effect of the 2008 recession on graduates (much of which is still ongoing) that I don’t even know what to cite here. The negative effects of the 2008 recession are so distinct I have been in multiple classes which has at least mentioned some of these statistics. And even if you’re someone who wants to argue that it is character-building it has to be agreed upon that it’s by no means a “fun time”. I guess it might seem a bit silly that I’m explaining the negative effects of a recession, but in 2008 I was a grand total of 8 years old and for the subsequent 4 years that followed, I wasn’t too interested in the financial state of the world for the obvious reasons. So although I was alive for that time, it’s not exactly something I can claim to have truly experienced.
Anyway, the punchline to all of this 2008 sucked build-up is that unfortunately, it seems most experts foresee a serious and lasting economic crisis at the world’s doorstep. In the words of Jason Furman, former Obama economic policy advisor and professor at Harvard’s John F. Kennedy School of Government, “At this point, this feels much worse than 2008. Lehman Brothers was quite bad, but it was the culmination of a sequence of things that had happened over 14 months. This hit all at once.” You could say this is where the lack of historical precedence comes in. A recession is not a novel concept by any means, but in this case it’s important to recognize that the reason for the crisis itself is arguably quite unprecedented. Essentially, a major problem with COVID-19 and any such future pandemic is that in order to social distance and follow through with all these efforts to “lower the curve” decreased demand across a huge variety of industries naturally follows. That doesn’t mean that we shouldn’t social distance of course, it’s of utmost importance in limiting the impact of the virus, but a lasting fall in spending such as this one signals some pretty serious things for the future.
In any early economics course we learn that humans can be inherently irrational and that’s where a lot of the rather simplistic models taught in an Econ 101 textbook break down because they of course assume that people are–by that model’s definition–rational. However this kind of early economics course analysis fails to acknowledge that there is no reason that the model itself cannot be flawed. Perhaps people are acting “rationally” (whatever that really means), but the natural limitations that come with any model limit us from seeing a particular action as rational (as a side note, this is actually what I find to be the great fun of data-driven economic analysis and many say this is the direction the field is moving toward). Something that strikes me as interesting about COVID-19 and its impending financial crisis is that so many of the real problems are going to be caused by generally “rational” behaviors.
I’m not saying that hoarding toilet paper or panic buying is the most rational choice, but according to experts, generally socially isolating and staying away from social gatherings definitely is. At the same time, doing that is objectively bad for business. This kind of dichotomy is very meaningful. In the crises past, former President Bush famously recommended people “to go shopping more” and following World War II in the 1950s being a consumer was seen as patriotic. Meanwhile this Sunday, the LA mayor ordered all bars, nightclubs, and dine-in restaurants to close. Going on social media even prominent celebrities are encouraging their followers to stay home. Sure, in 2020 this is not necessarily the opposite of shopping because the internet exists, but this is definitely quite the departure from boldly declaring that participating in consumerism is American. This difference is not just an interesting little thing to note, but a deeply important thing to keep in mind when thinking about how the government can help the economy recover in the wake of this virus.
Why? Well quite simply, the very concept of the need to self-isolate has its own very unique slew of problems that will need to be addressed.
One already heavily discussed issue is that ability to self-isolate and continue to work (and by extension spend) is naturally not a privilege extended to all industries in an equal manner. Plus it doesn’t help that the U.S. has a woefully unregulated paid-leave system. As a Berkeley student studying statistics and economics it’s easy for me to fall into the trap of selection bias: almost all of my friends will likely have jobs that can go online in the future and even now, its at least not impossible for university learning to be online. But that is not the case for the real majority of U.S. workers! For some workers in the biggest industries that cannot do the same work online (such as Retail, Construction, and Leisure and Hospitality) not coming into work can mean struggling to pay rent, let alone having any discretionary income to participate meaningfully in the economy once the worst is over and self-isolation is no longer as necessary.
On top of that, the “unprecedented” travel restrictions which are meant to preserve public health of course do quite the opposite for economic viability of the industry. I mention this not because it is my intent to say that these are unnecessary (it is quite the opposite), but because all of these factors and more, when aggregated present their own new problems and much needed creative solutions. It is not enough now to encourage consumer spending against the interest of public health but rather the government must take an active step in funding important programs that will help those most at risk due to health or financial reasons. Funding public health and instating programs like paid-leave, and significantly more will be absolutely necessary to not only help the U.S. recover in the future, but to help those most affected now get through this extremely tumultuous time.
A personal note from me, our UWEB VP of Administration and Publication:
Last week, UC Berkeley announced that all classes will be made online for the remainder of the semester. As a result of this, UWEB will not be holding any of the events we had on our calendar from this point forward. That being said, my committee and I will continue to post regularly on this blog and I will continue to send out newsletters. We will be taking a brief hiatus for Spring Break next week but it’s back to our regularly scheduled programming Tuesday March 31st.
Thank you so much to everyone who has engaged with our content over the past school year and supported the creation of this website. We hope that you will continue to read and enjoy our articles even with the end of the traditional class structure.
It’s 9:30 am Eastern and the trading bell has rung. It sounds a little like a train rattling on its tracks, uncertain where it’s journey will take it. Much like what happened this particular Monday morning. A mere five minutes into trading, the S&P 500 fell by 7% triggering a trading curb (a temporary halt in trading that prevents people from going insane and repeatedly pressing the panic button to sell) that halted markets for 15 minutes. The markets calmed and traded resumed again. Almost as though everything was normal. At the time of writing, the S&P is still down 6.21%. This panic wasn’t caused solely by Coronavirus (it would be unfair to shift the entire blame of the stock market, but rather due to drastic price decreases in the oil prices (the lowest they’ve been since 1991, caused by the beginning of the Gulf War). To quickly summarize what is happening here are a few key bullet points that I won’t go into the details:
Coronavirus has significantly impacted transportation and export businesses around the world, leading to low demand for oil which led to drastically falling prices.
OPEC (Organization of Petroleum Exporting consists of 14 oil-producing companies that account for 44% of all oil production and 81.5% of global oil reserves) decided to cut oil production. This was in hopes to prevent oil prices from falling further by cutting supply by 1.5 million barrels a day. Saudi Arabia is the second-largest producer of oil. Russia (not an OPEC member) is the third. Russia and Saudi Arabia as of 2016 worked together on their production quantities. But not this time.
Russia decided to go against the OPEC decision, choosing to scale production up. Reducing production would benefit American shale producers, and Moscow wanted to retaliate in response to sanctions placed on Russian energy companies. They want to flood the market with their oil (making buying Russian oil cheaper than buying OPEC oil) which would increase the consumption of Russian oil.
Saudi Arabia reacted in retaliation by also choosing to ramp up production, stating that it would decrease prices for Asian consumers in hopes to increase their global market share.
The problem: both Russia and Saudi Arabia rely heavily on oil production: Saudi Arabia increasingly so. Petroleum production and sale accounts for 42% of its GDP. Russia’s oil and gas sector only accounts for 16% of its GDP. They both may not be capable of sustaining their economies without diversifying (or seizing the opportunity to gain market share).
So now we have a 30% price reduction of crude oil prices and since oil is a commodity sold on the stock market, and there are multiple assets linked to the sale of oil, people start selling assets when they face uncertainty. Being unsure means they would rather not take the risk, but instead, sell of toxic assets. And that means the world is going into more panic. While it’s already panicking.
But the general gist of the above was that there was panic. So much of it in fact that the financial markets plummeted so rapidly it triggered a countermeasure that hasn’t been used since the night President Trump won the election. But what can be said about this panic is that we have in fact seen it before. Throughout history, we have had epidemics impact our economies and our stock markets. We’ve had SARS and MERS, we’ve had H1N1, Ebola, and influenza. There was once the bubonic plague. During 2003, the SARS outbreak lasted 7 months, cutting travel back with Asian carriers losing $6 billion and American carriers losing $1 billion. The Brookings Institution conducted a study on the economic impact of closing schools in the United States. ¼th all civilian workers in the US (at the time) had a child under 16. One adult staying home would lose between $5.2 and $23.6 billion in just two weeks. Four weeks could have seen losses of $47.1 billion dollars. But we recovered, did we not? The economy has been a bull market (a market that has seen consistent growth, upward market prices, and faith that these upward market trends will persistent) since 2009.
Look at the above graph. We see the growth, the changes in the global economy that have been made. This current economy is unprecedented. Through globalization, we have the power to trade in an instant, transfer money in seconds and communicate so rapidly that changes across the world have more direct impacts on the economy then has ever been seen before. What we do today has never been done before. Then it will come as no surprise when we will term it this global catastrophe a Black Swan (as described by Nassim Nicholas Taleb in his book The Black Swan: The Impact of the Highly Probable). Any event described as such can be categorized by the following:
The event occurs as a surprise to the Observer.
The event has a major effect.
After it has been recorded, it will be written off as though it should have been predicted, as if the occurrences leading up to the event are observable and in plain sight.
The rise of the Internet was a Black Swan. World War 1 was a Black Swan. The dissolution of the Soviet Union was a Black Swan. And the thing that links them all (no matter how different they appear, is that we will explain it away in the future and eventually the world will continue as usual.
A study done by the World Bank in 2014 looked into the economic impacts of disease. In the study, they found that “infectious disease outbreaks such as the SARS (severe acute respiratory syndrome) epidemic of 2002– 04 and the H1N1 (swine flu) epidemic of 2009, behavioral effects are believed to have been responsible for as much as 80 or 90 percent of the total economic impact of the epidemics”(1). We attribute most of behavioural economics to things we perceive to be true: things that we perceive will affect us in the future, and that’s what the research reflects: when people panic, it’s not in response to the epidemic itself, but rather a response to the actions taken by individuals, corporations and governments.
Just last week on March 3rd, Jerome Powell (head of the Fed) recently cut the federal interest rate by half a percentage point (0.5%) in response to slowing demand and in hopes of encouraging consumer spending. It wasn’t stated but the underlying message was clear: warning bells are tolling. “It will support accommodative financial conditions and avoid a tightening of financial conditions which can weigh on activity. And it will help boost household and business confidence,” he stated last Tuesday. But interest rates are already low so investors find it impossible to maintain their confidence.
As Captain Jack Sparrow once said in the third Pirates of the Caribbean (At World’s End): “Let us not, dear friends, forget our dear friends the cuttlefish… flipper conories little sausages. Pin them up together and they will devour each other without a second thought. Human nature, in’it? Or… fish nature. So yes! We could hold up here well-provisioned and well-armed and half of us would be dead within the month!”(2). We can’t all expect to be holed up forever (in fact, there isn’t enough toilet paper for us to be holed up forever if Costco shelves are a measure to go by). Humans aren’t predictable, and that’s ok (we would be robots if the models and the theories could accurately contain the entire spectrum of human response and emotion). Worry and concern are natural responses to a pandemic, but it is completely unreasonable for us to expect that things will stay this way forever: be cautious and wary. Dark times are coming. Woe to us all.
Just kidding. Stay safe, wash your hands for 20 seconds and reduce unnecessary social contact and as Albus Percival Wulfric Brian Dumbledore once said: “Happiness can be found, even in the darkest of times, if one only remembers to turn on the light.”
(1) The, World Bank. Economic Impact of the 2014 Ebola Epidemic : Short- and Medium-Term Estimates for West Africa, World Bank Publications, 2014. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/berkeley-ebooks/detail.action?docID=1903364. Created from berkeley-ebooks on 2020-03-09 10:37:40
(2) Verbinski, Gore, director. Pirates of the Caribbean: At World’s End. Walt Disney Pictures, Jerry Bruckheimer Films, 2007.
Considering the political climate of where we are, chances are high that you’ve already been given the spiel of the importance of young voter turnout in at least one of your classes (or if not, you might be taking the wrong classes). Illustrated by the fact that young people account for half the eligible voting population, yet show up at alarmingly low rates (less than 20% of us voted in 2016), it’s clear that many feel disillusioned by our influence in the polls, because in the grand scale of things, how much difference can one person make? In truth, the real tried and tested question here is the sheer power of one age demographic showing up to the polls, and the answers speak for themselves.
So far, the presence of young voters in elections have made huge differences in the direction campaigns have been heading. Barack Obama’s presidency was arguably made possible largely by the young voters at the time choosing to show their enthusiasm for his campaign and presidency; in 2008, 66% of young voters under 30 voted for Obama, making the disparity between age demographics the largest it’s been since 1972. Similarly, his popularity with young voters did him great favors again in 2012, as the majority of the 22 million young voters who chose to show up decisively won him crucial states like Florida, Virginia, Pennsylvania, and Ohio.
Now, I’m sure many of us can agree that some of the most amusing (and sometimes simultaneously the cringiest) things on the internet are the desperate attempts of corporations and prominent figures trying to be relatable to the youth. Though these attempts sometimes miss the mark, it does say a lot that an entire marketing team is probably behind the decision of running a Hamburger Helper Twitter account (and apparently, mixtape?). This urgency is carried over in politics as well; Tom Steyer, a Democratic philanthropist active in clean energy and climate change action who just recently dropped out of the race, aimed to spend $4 million on ads targeting young voters. We are the first people they’re trying to reach on the internet, with Sanders and Bloomberg spending the most targeting people aged 18-34 on Facebook. As weird as it is to see Tik Toks on gun control and economic inequality, you have to acknowledge why they’re trying so hard to speak our language.
We can also see a few examples of low youth voter turnout inevitably worked against the interest of young people, a more recent popular example being on Brexit. When the U.K. voted to leave the EU earlier last year in a 52% to 48% vote, even though an overwhelming majority of young voters chose to stay in the EU, simply not enough of them voted. According to the BBC, while 90% of voters aged 65 and older voted, only around 64% of 18-24-year-olds voted (still significantly higher than American youth turnout). Because of this, conversations on economic equity, healthcare, and job security are now resurfacing and less secure than ever, and it will affect the younger demographic disproportionately higher.
The truth is, the outcomes of elections like the upcoming presidential election or Brexit make the biggest difference on us in particular. Historically, the Great Recession hit young populations more than anyone else back in 2008 and beyond: student debt issues skyrocketed, newly entering professionals struggled to find their footing, and homeownership dropped significantly. Think about where we’ll be in four years; many of us will be graduated, looking at graduate school or careers, maybe even houses and families. Even if you think you don’t care now, you will have plenty of reason to care within the next four years, or even within the next few months as responses to things like viral disease prevention and gun control resurface. With all the attempts to reach the young demographic and the decisive outcomes we’ve influenced in recent elections, it’s no wonder those seeking power often take our opinions and influence more seriously than even we do. The least we can do at this point is to show what we actually want.
To find your polling station or check on registration status, be sure to visit https://www.vote.org/ . See you on Tuesday!
Right. To recap on where we left off. We had learned about what the geographical boundaries of the EU constituted of, as well as some basic requirements to join the European Union. We haven’t yet looked into the financial operations of this organization, and that’s what this article aims to explore.
We have all heard of the Euro: €, the EU’s adopted currency. But we also must know that not all countries in the EU have chosen to adopt this currency. The Eurozone comprises 19 countries (out of 28) who choose to use the Euro as their national currency. The currency was first introduced in 1995 as a monetary union but physical banknotes didn’t come into circulation until 2002. 343 million people use the Euro, making it the second-largest and second most traded currency after the dollar. Like the United States has the Federal Reserve to monitor trade and to the circulation of currency, the Euro has two banking entities that serve the same purpose:
The European Central Bank (in Frankfurt):
The ECB has the sole authority to set and decide monetary policy.
Its tasks involve setting and implementing monetary policy, taking care of foreign reserves and operating financial market infrastructure.
While the ECB is governed by European law, it does have shareholders and stock capital, with its €11 billion capital held by the 19 members’ central banks as shareholders.
The Eurosystem – which consists of all the individual country central banks and the ECB:
The Eurosystem mints and distributes notes and coins to member countries.
They conduct foreign exchange operations, as well as holding and managing the official foreign reserves for member states.
The system ensures that capital transfer within EU countries can be counted as domestic transactions rather than international so typical ATM withdrawal fees don’t exist within the EU.
While the United States faced the 2008 financial crisis, Europe too, dealt with the Eurozone Crisis where several eurozone member states were unable to repay their government debt (these countries were Greece, Portugal, Ireland, Spain and Iceland and have the unfortunate acronym of PIIGS). They were also unable to bail out banks within their own national jurisdiction, resorting instead to borrowing money from the IMF and the ECB. It’s hard to say exactly who was at fault here, but economists generally agree that the rapid globalization of markets in the early 2000s followed by lenient lending practices (easy credit) led to the 2008 financial crisis in the United States (or as we know it to be called – the Great Recession). This had a rippling effect across the globe, finally culminating in weeding out poor fiscal policy in European countries. For instance, Ireland (following a period of rapid growth through increased foreign investment) expanded lending in the 2000s, and the sudden ‘08 crisis led the country into recession for the first time since the 1980s.
An expansion in the credit line, low corporate tax and interest rates (set by the ECB) as well as poor supervision over the banking industry led to a burst in the Irish property bubble, exposing the market to increased foreign bank borrowings (rising from €15 billion to €110 billion in 4 years). The money was borrowed to fund building projects, and when the real estate bubble burst, the values of these properties plummeted, leaving the banks to be illiquid (a term which means that the assets cannot be sold for cash money that easily) by €4 billion. Businesses closed, immigrants left and the rise in unemployment was catastrophic:
Ireland was saved from bankruptcy with a €67.5 billion bailout loan from the ECB, the IMF and the European Commission and was the first debt-stricken country to repay its loan. In September 2011, all banks were declared financially stable again (and we can see that in the graph above as the unemployment rate fell again in 2013 when Ireland officially exited the bailout). But the effects were devastating. In what was described to be “one of the most expensive banking crises in history”(1), thousands lost jobs, lost money and lost faith. The recovery was long, and slow as Ireland increased its supervision over financial entities. The Financial Regulator resigned. In 2016, for the first time in seven years, net migration was positive as people returned home. Taxes were high while social spending fell (efforts to balance the budget). Foreign companies chose Ireland to start off their European expansion citing its low corporate tax rate of 12.5% (with countries such as Apple, Google and Microsoft booking revenue in Ireland) leading to an increase in foreign investment, and the export rates increased, supported by a weak euro(2). Economists termed the revolutionary turnaround Leprechaun Economics, with Ireland reporting 26% growth in 2016. The other countries didn’t have it so lucky.
PIIGS isn’t just Ireland though and the other stories are much worse (not all of them found the pot at the end of the rainbow if you catch my drift). If the picture I am attempting to paint to you doesn’t scare you if you wonder how bad could it really be, you haven’t seen the effects of a recession. You haven’t seen the harrowing effects of job cuts or wage reductions. I had a friend from Greece who was studying at a summer camp in 2015, seven years after the crisis. Having just received a phone call from her father, she told me that she wouldn’t be able to spend a dime for the remainder of the trip. Not on food, not on transport. “The banks have frozen our accounts,” she had said. There were no tears, I remember. But that was their money, was it not? And it was gone. Just like that.
You might be wondering what any of this has to do with the UK. The crisis happened to everyone, you say. But that’s where you’re wrong. It’s been theorized that the Eurozone crisis was one of the factors encouraging an already polarized UK to separate from the increasingly interconnected EU financial market, in preparation for another potential crisis. The European Journal of Political Economy published an article in 2018 (titled “On the Causes of Brexit”) stating that the “crisis-driven economic insecurity is a driver of populism and political distrust”(3). Other studies conclude along similar lines: distrust for the stability of an international market has forced the United Kingdom to reconsider its position in the EU. Former British Chancellor of the Exchequer (UK’s National Treasury – I had to look this one up too) Alistair Darling was quoted to have said that “ people’s faith in structures and authority was shaken… A financial crisis became an economic crisis and that the economic crisis became deeply political.”(4) His words echo what research has shown – a rising “them and us” culture. And the UK isn’t alone. We see it here, too in the United States with a large rise in nationalism, closing our borders and markets. It’s rippling through the world, a fear that of the outside, of the unknown. And it’s hurting relationships, severing decades of partnerships and leaving the future a little more unsteady.
I fully accept that all opinions are my own and that I am no expert on these matters. Having said that, I had fun researching and writing this article and I hope to see you here again next time! (Yes these articles will be more regular, I hope).
(1) Patrick Honohan, Governor of the Central Bank of Ireland
(2) Side note for non-econ majors out there a weak currency implies that it becomes expensive to purchase foreign goods. This is because the foreign currency is worth more than the domestic currency. But it also means foreign countries are more willing to buy exports because, in relation to their own currency, the goods exported by the weaker country are cheaper to buy.
(3) Arnorsson, Agust, and Gylfi Zoega. “On the Causes of Brexit.” European Journal of Political Economy, vol. 55, no. December 2018, Dec. 2018, pp. 301–323., doi:https://doi.org/10.1016/j.ejpoleco.2018.02.001.
Recently, I watched my first live musical and it was the best entertainment I’ve had in a while. One thing I will say, it’s much better than watching a movie version of a musical. There’s just something about seeing the actors in person that pulls the audience into the story!
The production I watched was a local one in the Bay Area and although I’ve never been to see a show on Broadway, it got me thinking how Broadway musicals and shows are becoming more mainstream and widespread in America, and how crucial they are to New York City’s economy.
After the huge success of Hamilton, Broadway has been on more people’s radars and industry data show a big increase in ticket sales and revenues.
Broadway, also known as the Great White Way, a name it earned because it was lit up with white signage on theaters, counts performances at 41 theaters in its scope (source).
Usually, when people think of entertainment, Hollywood comes to mind, but NYC also has a robust entertainment industry. Within that, Broadway has a significant impact on New York City’s economy, which is doubly important because NYC is the biggest city (by population) in the US. Currently, popular musicals like Wicked and Hamilton bring attention to the shows, leading to wider audiences and greater revenue. Tourism is another way Broadway brings money into NYC’s economy. The shows attract many international and domestic tourists to the city, for whom the shows are a must-see. These Broadway shows play a large part in making NYC, and the US in general, an economic and cultural capital.
Musicals, like The Phantom of the Opera and Hamilton, are the most popular type of Broadway show with over 11.4 billion tickets sold in 2018 (source) which made over $1.4 billion in revenue (source). The longest running show on Broadway is the Phantom of the Opera, and it is extremely well-received by both critics and the general public. It has even been adapted into a movie that has made it a beloved musical to many more people. This is the kind of wide-reaching impact a Broadway show can have. Not every American can go watch Broadway shows, but the movie version of a musical can be watched all over the country and the world. For example, The Phantom of the Opera has made $845 million on Broadway alone and the show is still running today (it’s been performed over 10,000 times!) (source).
With the boom in popularity of Broadway, there’s sure to be more iconic Broadway shows in the future!
Am I the only person that dances in front of the mirror in their bathroom? It’s so easy to do that at home when you’re in the comforts of your own bathroom behind closed doors, but in college it’s different. I usually have music blasting in my ears while I’m brushing, and I’m ready to jam out to whatever song I have lined up on Spotify until I realize that I am in my dorm’s bathroom. A bathroom that twenty other people on my floor use. Don’t get me wrong. My passion for dancing only goes so far as dancing in front of the bathroom mirror, and it’s hard to pursue this silly passion when I’m constantly on guard about who’s going to walk in to see me jamming out at 2 in the morning. But I do it anyways while I brush my teeth and complete my nightly routine—it’s relaxing after a long day of studying and exhaustion.
I make it sound like dancing is the love of my life, but it’s really not. I just like practicing my disco moves in the background, while I cheer on my friends and families as they show off on stage. I’ve also just grown up watching dance competitions on TV and Youtube videos featuring professional dances and it’s an evident part of Indian culture to where I feel like I am a part of the dancing even if I’m not. My younger sister and I have this tradition where we surf through professional dance videos on Youtube whenever we’re together.
Coming to Berkeley has been a wild ride, but I’m glad I can continue to pursue a side passion: admiring dance performances. Whether it’s walking through a parking garage and catching a glimpse of AFX practicing or going to Bollywood Berkeley to witness a dance competition, dance brings communities together. This past weekend, I went to Bollywood Berkeley, which is the largest collegiate South Asian dance competition on the West Coast. It was an amazing experience watching dance teams from all over the country, including three from the state that I am from, Texas, and many more.
I dragged some friends along to come with me to enjoy the show, and was explaining what I knew about the teams as they came and performed. It was great to see that I wasn’t the only one that was excited to see these performances. The entire audience was cheering and clapping after each and every performance. Seeing people from different backgrounds and cultures come together to watch South Asian performances was heart-warming. I became even more excited as I saw that the people around me shared the same passion as me.
Unfortunately, now I don’t get to do this with my sister, but we’ll text each other videos every now and then to bond over a new move or music video. I still dance in front of the bathroom mirror when I can and yes I’ve been caught once, but that doesn’t stop me. I’m glad I can continue to pursue my small passion with the stress that Berkeley brings.
Sometime ago I had a quintessentially edgy(™) conversation with some friends because apparently non-Valentine’s Day ads don’t exist this month. It went a bit like this:
A friend, facetiously: Capitalism is SO romantic
Me, leaning into it: ROMANCE is so capitalist
What did either of us mean by that? It’s unclear. Regardless, no one loves being the cold, romance (and late-stage capitalism)-hating friend more than me, but every once in a while I like being a data-backed, cold, romance-hating friend so I thought, “well surely nothing is less romantic than researching romance to back up my hate for romance,” and thus the idea for this article was conceived.
However, therein lies the problem, if I’m totally honest, the reason I like to throw shade on Valentine’s day and other forms of the commercialization of relationships (particularly romantic ones) is because I don’t completely get it. Not necessarily the commercialization part, I can understand that there’s tons of money in leveraging human emotions, but the relationships part. In highschool I used to spend my time being an annoying asshole to my friends in relationships asking questions like, “But why do you need to be in a ‘relationship’?” or “Why do you need to define it specifically from friendship?” and in particular “Why bother having a girl/boy friend when you know you’ll just break up?” I probably wouldn’t directly ask those questions anymore, but I do still ask myself.
It’s not as if I don’t understand friendship. I have a great many amazing friends and love them a lot, but that’s maybe exactly why I have difficulty understanding the existence of romantic partners. Other than the physical aspects of a romantic relationship, which of course are not even a part of everyone’s idea of a romantic relationship, what exactly is this distinction between platonic and romantic relationships? Is the difference one in the goal of the relationship? If it is, why? Traditionally, (read: in the traditions I am most familiar with) one might answer the biggest difference is that one becomes a marriage and the other, no matter how long term, doesn’t get any official title other than “friendship”. That’s crazy. That means there is a word to distinguish between someone’s wife and someone’s friend, but there isn’t a nearly as easy way to quickly distinguish between someone’s friend of 20 years and someone’s friend from last semester. Surely if there is this kind of distinction in language surrounding romantic and platonic relationships there must be some important, even inherent difference.
At this point, you might stop and think, “well there is definitely some sort of difference, but it’s complicated and why should it be so important to put it into words when I can feel it?” To that, I have no answer. I just like to waste my time chasing pointless and unanswerable questions. I’m cool with that and if you’re still reading I’m operating on the assumption that you’re cool with it too. Plus maybe it isn’t actually unsolvable because even just a quick google search provides A LOT of research.
In a complete plot twist, having a large amount of hits on google in no way indicates that something is “solved”. Although there is no shortage of very interesting, mainly psychological, studies about friendship, romance, and other such relationships, even those with results indicating something significant have their limitations. A study from the University of Florence (Ponti, Guarnieri, Smorti, & Tani, 2010) which seeks to create measurements of friendship and romantic relationship qualities interestingly uses the same 5 dimensions (Conflict, Companionship, Help, Security, and Closeness) for both measurements and achieves results that indicate their 2 proposed measurements could be generalized. However, they use these same 5 dimensions with the major qualification that they choose to exclude love and sexuality in order to only compare the similar dimensions of romantic and platonic relationships. That’s not super helpful in trying to determine differences. Additionally, the potential existence of such measurements creates further questions: How generalizable can any such measurement be? What kinds of limitations would it have across cultures, nationalities, sexualities, etc?
A different study done in the U.S. (Campbell, Nelson, Parker, & Johnston, 2018) examined the differences in core themes between friendship and romantic chemistry. Survey participants wrote in brief phrases and words associated with the 2 proposed types of chemistry while researchers categorized these responses into themes. According to the study, the appearance of core themes important to the 2 types of relationships were similar, but the frequency of certain themes were very different between friendship and romantic chemistry. The theme of “Reciprocal Candor” was the most frequently cited theme in both proposed types of chemistries, but the themes of “Attraction” and “Love” were more frequently indicated in romantic chemistry while possessing “Similarities” was a core theme found more often in participants’ responses about friendship chemistry. But to what extent can these results be reasonably interpreted? As common sense might indicate, results like these might point to there being some inherent difference between at least initial romantic and friendship chemistry, but in the end such a study is really more exploratory than anything else, something noted in the paper itself.
One thing you come across very often if you end up falling into such a literature review are phrases like “scarcity of research available” and “lack of empirical studies” and “hope to inspire further research” and so on and so on. And, particularly in this case, these phrases aren’t playing around. After reading a variety of studies, not all of which I’ve discussed because this single article can’t be as long as a study itself, I have more questions than I wanted to ask in the beginning! But I guess in the end, it is what it is. It’s perfectly understandable why there aren’t clear answers when these are such confusing questions to do with human emotions and interpersonal connections. If anything, it would be deeply suspicious if someone were to say they fully understood our weird ideas about how we should and do interact with each other.
Nonetheless, just because it’s natural doesn’t mean it’s good. Personally, I’d argue that the fact that a “romantic relationship” is so ill-defined is something that aids in the commercialization of romance (particularly on Valentine’s Day). We don’t have a Friendship Day where we are marketed a short specific list of things that are the “normal” thing to gift your best friend. Somehow maybe we are more understanding about the individuality of friendships. Romance is confusing and a shortlist of gifts established maybe by tradition but definitely supported by huge industries is less confusing. Thus our understanding (or lack thereof) of romance and its own commercialization go hand-in-hand. Then again, that’s just me being the annoying cold, romance-hating friend I am. One could just as easily argue that chocolates and flowers are objectively nice plus no one is forcing anyone to buy those things. It’s not as if romantic partners can’t have a nice day AND purchase some pink and red Dove chocolates. The commercialization of romance is no less confusing than romance itself.
And it is at this point that we’ve now come full circle and I once again have too many questions, no answers, and am left with just my own cynicism. But, hey, such is life. If, during the month of February when humanity’s interesting (and clearly unexplained) penchant to create a strong distinction between romance and friendship is at its most commercialized, I get to be edgy and say “Romance is so capitalist.” I’m pretty content.
Ponti, L., Guarnieri, S., Smorti, A., & Tani, F. (2010). A Measure for the Study of Friendship and Romantic Relationship Quality from Adolescence to Early-Adulthood. The Open Psychology Journal. 3. 10.2174/1874350101003010076.
Campbell, K., Nelson, J., Parker, M. L., & Johnston, S. (2018). Interpersonal Chemistry in Friendships and Romantic Relationships. Interpersona: An International Journal on Personal Relationships, 12(1), 34-50. doi:http://dx.doi.org/10.5964/ijpr.v12i1.289