Friedmen in the news

In an article in the Daily Finance there was some information about the infrastuctural situation in China. In the article it tells us how the government is not selling the land but leasing it to the builders and foreign investors. It wants to say that it does not want to ruin the structures created in the past. The central bank is trying to increase the prices of the land. The government has borrowed trillions of dollars from the banks to develope the infrastructure.

Milton Friedmen here would think that the central government should not lease the land but to sell it. Here we see what Milton Friedmen would see seperating political freedom from economic freedom. Here the government is interfearing by not letting the developers buy the land but letting them lease it. Friedmen here would say that the government should act as umpire and only stepping in when there is something wrong. But here they are limiting the amount of development by not selling the land. This way they are controlling development. He would say that the government is controlling the selling. If the govenment will allow the to buy the land, it will be properly utilized and the real prices of the land will be seen. He further adds that if the government will sell the land, the money received can be utilized for many other productive things for the people and also help to reduce the debt of the government.

I totally agree with Friedmen on this. The government should be liberal about the selling of the land. This will indeed help the development of land. The land is expensive as the government is trying to hype the prices by controlling it. The real thing is that the prices are fake. The buildings are empty and there is no one to buy as it is expensive. Here the government is trying to think about the long term effect. I think if they become liberal about the selling of land. There will be an increase in the total cost and the real value will be known by the people. Here friedmen argues in freedom and freedom is to success. If the land is kept in the openmarket there will be competiton which will show the true picture of the product. If the government is the only lender of the land then there will be the situation of monoploy. So I think that if the government allows to sell the land it will help for the betterment of the people.

MARX IN THE NEWS

On September 10, 2010 there was an article in the CNN about the strike by the people working in the public sector companies. The workers working in the public sector and government jobs went on strike because the government decided to reduce the government debt by reducing the monthly salary and wages of the employees and by delaying the retirement date of the employees. The government has also decided to cut the bonuses of the employees. Greek Prime Minister Giorgos Papandreou declared that the government's debt can only be cleared by doing these measures. Mr Papandreou said it will freeze public sector pay, raise taxes and change the pension system, insisted that the proposals would be fully implemented. The workers will see around 10% decrease in their salary. The government is trying to slice of the deficit by hurting the working class.

According to Marx this idea of the government is wrong and unjust. He thinks that government is exploiting the people by making them work more and giving them less wages. They want the workers to work more and pay less to them. He adds that government wants to clear the debts of the country with the help of the money of the poor working class. Marx tells us that this kind of decision of tax rise and cutting wages will affect a lot of middle and working class people's lives. He tells us that by cutting the amount of wages they are alienating them. The government is not paying the right amount of wages the people deserve for their labor in their work. Marx tells us that the government is trying to increase the working limit of the people so they can use the pension money of the employees, which they rightly deserve.

I totally agree with Marx. The government is for the people and if they are not thinking for the betterment of the people then it is completely wrong. The government is trying to clear off the debts which the banks created by using the money of the people, who work hard to earn their money. If there will be a raise in taxes and cuts in the salaries of the people, it will be hard for the people to survive and fulfill their basic necessities. I think the banks who have created this debt should be solely responsible for this. The banks think this as a game, but it is not a game its playing with the peoples life. If the government takes the decision to what it proposes then the poor people will be hit the hardest.

LOCKE IN THE NEWS

On September 02, 2009 there was an article in TIME about the problem of Global Warming. We all know that the problem of global warming is man-made, which is created by gas emission and cutting trees. We know that we have added a lot of carbon dioxide and other different gases by deforestation and burning fossil fuel. Due to the increase of all these harmful gases the world's seasons are changing. There was a conference in Geneva where more than 150 countries gathered to discuss the problem of global warming and what steps need to be taken to create a better global alert system. They decided to share the information to the local communities in the country so any further losses can be controlled.

Here John Locke would tell us that when we install our labor into something, we can claim that as our property. But he says that we can only claim something which we can use. As all the natural resources are common for all to use. The people applied their labor to get the resources, but people have wasted a lot of resources which have created the situation of the global warming. Locke wants us to know that these natural resources are not something to store as property. Locke tells us how we should not waste the natural resources. These natural resources are precious for survival of mankind and should not be stored as property. Locke tells the people to use the resources wisely and not abuse them. People have consumed a lot of resources, which shows the inequality of its usage. Thus, certain people using more and wasting and others have to pay the price for it.

I agree with Locke that people have abused a lot of resources. They have collected and hoarded resources. These resources are for survival and they are not a property that we can call it as our own. As we know that emission of gases have created the problem of global warming. Due to deforestation the carbon dioxide in the atmosphere cannot be converted into oxygen. I think there should be some kind of awareness that needs to be created that people can understand to use the natural resources wisely and only use these resources which we need and not waste them. As these resources are a gift to the mankind and it is not a property that we can claim as our own. We should use it for our survival.

A COLOSSAL FAILURE OF COMMON SENCE
On 20th January 2010, Lawrence G. McDonalds came to Depaul University for a lecture on the failure of Lehman Brothers. He was a former vice president of the company handling both joint equity and fixed income divisions. He started his lecture by talking about his childhood and the path that he traveled till he was hired as a VP in Lehman brothers. He talked about how it was stressful for him after his parents divorce, his life as a college student and finding a job after college. His main goal was to enter the WALL STREET WORLD and for that he would dress up as a pizza delivery person so that he can have a word with the CEO's of the companies. He also tells a great saying " ITS NOT WHERE YOU START IN LIFE, ITS WHERE YOU FINISH". He tells about the company surviving the civil war, the great depression and the World War. The company lasted for 158 years and in 2008 the company was destroyed.

He then starts talking about the workings of Lehman Brothers and its downfall. He talks about how the company crashed, which was because of the CEO Richard "Dick" Fuld and a few top executives who were Richards followers. He was even called the invisible man as he was always away from all the problems which the company was facing. There were a handful of people who knew about the problems, but they were silenced (fired) by the top authorities, as they did not want to know anything that they could not understand. Lawrence tells us how the company was using Mark to Market form of Accounting and which arose the problem in the Mortgage sector. He told us how it had grown very complex and so it was difficult for the company to understand. He said “whenever you have an investment opportunity the principal is your exit strategy" which they did not understand as the top management did not understand the 21st century financial problems. Lehman brothers now had Ninja Accounts which states for NO INCOME, NO JOBS, NO ASSETS which results in no profits. When the Head Risk Manager started showing the problems the company was going through Richard literally told the manager to shut up. The main problem was that the top management consisted of people who did not have any knowledge of finance and banking. It was like monarchy prevailing in the company. Lawrence told that there will be abuse of power as time passes, and that’s what happened as Richard was the CEO of the company for more than a decade. The company kept on taking more and more risks and the leverage ended up 44:1.

After discussing the downfall Lawrence talked about the last days at Lehman Brothers. Bank Of America was looking to buy Lehman Brothers. It took them 10 days to figure out the accounts of the company. It was that bad. He said “Lehman brothers had to fail to get the tarp back.” If the government did decide to save Lehman brothers then it would have increased the costs of GM, Chrysler and AIG worst. And so the 750 billion dollar empire was destroyed.

ARISTOTLE IN THE NEWS

On January 15th, 2010 there was an article in the CNN about JPMorgan Chase earning profits in its 4th quarter. The company’s books showed $3.3 billion in profit. The company said it earned a good amount of profit in the last 3 months of the year 2009, an earning .74 cents per share, which was much better than the expected 61 cents per share. This shows how the banking sector is regaining from the harsh recession that the world saw. Large profits of the company were obtained from the investment banking business, which earned $ 1.9 billion.

The main idea for the company was to invest money and lend money. They are using money to make money. The main motive of the company is to earn profits for the investment and lending. This shows how the banking sector after touching the ground is rising up.

Aristotle here is against the ideology of money making money which the company does by investing and lending. Aristotle thinks of it as an unnatural art of acquisition which is usury. Banks invest money and lend money as loan at a fixed amount of interest which is the money making money concept. Aristotle thinks that the company should have a limit on the profit that it makes and to earn only the amount that would help the company to fulfill its basic necessities. Aristotle thinks that the concepts the banks are using to earn profit is wrong and have made profit earning and money making their top priority and they are devoted to money. Aristotle thinks that the banks forgotten the meaning of money.

I think Aristotle's ideologies cannot work in the current world we live in. He is against the money making money concept which the banks are following. Which I think is incorrect. The banks that lend the people money on interest are providing a service to the people and through which the people can fulfill their requirements. I believe that the banks or any other sector should acquire as much as they can, so that when there are bad times the accumulated wealth can help them survive. There is nothing wrong in acquiring money ethically. The banks on the other hand are providing services of loaning money to people which helps keep a flow of money in the market which helps the economy to rise. I disagree with Aristotle's ideology of Money because it limits growth which is necessary to survive.