Wednesday, February 6, 2008

Is the U.S. already in a recession? Sure looks like it.




Almost daily news is released showing the U.S. economy is slowing. The consensus seems to the we are already in a recession. What are the implications for the War in Iraq? U.S. foreign policy? Unemployment and the economic health of the U.S. moving forward? What would be the implications for you (and the rest of the world) if you were abroad as a foreign correspondent and the world's largest economy heads into a deep downturn? How would you report this story? - MT

(PAGE ONE - WSJ, 2-6-08) Recession worries surged, slamming financial markets, amid signs that service businesses -- from hotels and retailers to banks -- may be stumbling in both the U.S. and Europe.In the U.S., a key barometer of the strength of the service sector dropped to its lowest level since October 2001, and suggested those businesses are now contracting. In Europe, a similar indicator fell to a four-year low.The readings fanned fears on Wall Street that the U.S. is about to tip into recession, if it hasn't already done so, particularly startling analysts who had viewed services as the nation's last bastion of economic growth.http://online.wsj.com/article/SB120221986525544121.html?mod=hps_us_pageone

Stocks plummeted on Wall Street on Tuesday after a business survey provided another strong signal that the United States might be in the early stages of a recession. The Dow Jones industrial average fell 370 points as the market experienced its worst day in nearly a year. http://www.nytimes.com/2008/02/06/business/06stox-web.html?ex=1360040400&en=9470859e1128992b&ei=5124&partner=permalink&exprod=permalink

NEW YORK (AP) -- Lingering hopes that the U.S. economy might avert a recession withered Tuesday after the nation's service sector -- its banks, travel companies, contractors and stores, among others -- shrank for the first time in five years.http://www.nytimes.com/aponline/business/AP-Economy.html?scp=4&sq=Recession&st=nyt

20 comments:

MGerber said...

It is impossible to discuss all the implications of the ever so slowing economy and the War in Iraq, U.S. foreign policy, unemployment and the overall economic health of the U.S. moving forward, in one short essay. However, if I were aboard as a foreign correspondent, this situation would definitely infiltrate into my stories.

One key concern about being an American working as a foreign correspondent during a recession is the potential that I might be called to come home; I might personally be unemployed as a result of the economy. It is tremendously expensive for a network to place a reporter abroad, especially if that country rarely provides events that would be considered ‘newsworthy’ according to broadcasting standards. Unless I worked for CNN International or likewise, or were in a ‘hostile’ location, I would probably be called home until the economy started to bounce back.

An economic slow down will effect the likelihood of Americans traveling abroad to foreign countries. This means that if I am a travel foreign correspondent, I might have to make a shift in how I present stories with the understanding that many of my readers may not be able to afford to go abroad. The Economist’s in their forecast edition The World in 2008 predicts that with the rise of the Euro, Americans will find it extremely expensive to travel abroad to Europe in the coming year. The result will be more Americans vacationing domestically.

Likewise, traveling implies transportation. With the economy slowing down, more pressure will be placed either finding cheap fuel options such as energy efficient cars or research towards new sources of energy other than oil. Europe has long dealt with high energy prices through marketing and selling extremely small energy efficient vehicles, for example, one of the leading cars in France is Diamer AG’s smartcar. This past January Diamer Chrysler started marketing an American version of the smartcar. As a foreign correspondent, to help calm an American audience, I might report how Europe has long confronted high gas prices. This would help prove that American are not the only ones being gauged at the pump and provide some money saving options, such as reporting on the development of hydrogen and electric vehicles.

While the U.S. economic is on a downturn, it does not necessarily mean the world’s economic will follow suit. Once again the Economist’s The World in 2008, argues that while Asia’s economy might slow down, it will not be a universal affect. For example, China is about to step up and have an economy boost in regards to tourism due to the 2008 summer Olympics.

Annah said...

If we enter a recession, I suspect the war would come to a faster end (for Americans, at least). With a recession will come even additional budget cuts, especially for domestic programs. This has already been happening as the department of defense budget continues to increase at the expense of education, health, and arts programs. U.S. citizens will feel the burden of these cuts and use the war in Iraq, whether appropriate or not, as a scapegoat of blame. Protest and dissent will grow, and the government will be forced to withdraw preemptively (coming full circle from its preemptive entry!) in order to maintain peace at home and save dwindling cash supply in the budget.

Some argue that history shows wartime spending can bring an economy out of recession, such as in WWII. However, the Iraq war is not a fair comparison because a) the increase in jobs for military goods is limited to the ballooning pockets of the giant weapons manufactures and oil companies, such as Raytheon and Exxon Mobile. There isn’t the cross-sector boom which one saw in the late 30s, early 40s.
Secondly, the psychological support of WWII gave American citizens a strength of spirit to ration certain foods, like sugar and butter, and go without the same amount of fuel without resentment. Americans today would not accept a rationed world for a war they don’t support.

The implications for foreign policy would most likely be ugly. I can imagine hasty decisions to befriend immoral leaders of wealth so that exchanges of favors could sustain the U.S. economically. I would imagine our enemies of a decade ago would start to become our friends of today.

My hope is that something good could come out of all this. I don’t think that the first capitalists envisioned a gluttonous society, which is what we’ve become. Spending beyond our means, buying things we don’t need, losing consciousness of the resources we’re exhausting are the product of the wealth the U.S. has acquired. Perhaps in a time of recession, people will learn to be thrifty again, forgo their pride in needing that new flat screen TV or car or ginormous house and find within themselves a new source of contentment. While I think a good dose of this could be healthy for the growing middle class, I hate that the recession won’t hit the economic elite as hard and that it will take the largest toll on the lower bracket of wage earners.

Could a recession bring people together? Could it remind everyone the need for greater community action and social welfare? Could the tangible loss be outweighed by the potential social gain? I hope so.

To report this story, I would interview people from all walks of life in the country I lived. If I was in Lebanon, I would talk to the politician, the bread maker, the housewife, the child in school, the older disgruntled Palestinian refugee, the wealthy businessman, the U.S. educated academic, and members of the different Lebanese factions to paint a picture of the perceptions of what this U.S. recession means to them, whether accurate or misguided. I would thoroughly investigate the impact of a U.S. recession on business in say, Beirut, for example. I would go back in time and uncover similar periods of recession and what it meant for the country then, and what differences there would be in today’s world based on the technological and political differences.
I would also read books on economic trends since I am challenged when it comes to understanding economics.
In the meantime, I would make sure to have my fingers in a few financial baskets so that when the paper or magazine I work for goes under, I have a few other sources of income!! Maybe I would buy some property in Beirut, or start selling all my unneeded belongings on ebay. 

Arman said...

First of all, the consensus on the recession is not so firm. Although, many economists believe that the current quarter will be the maximum danger point for the economy to slip into a recession, there are some experts who do not agree. “One extreme number on its own is not a reliable recession signal,” said Julian Jessop of Capital Economics. “It is so out of line with other January indicators that it is hard to know whether or not to believe it.” (NYT)

However, the severe slowdown rise concerns about the cost of U.S. military operations in Iraq, which is rising rapidly. Thus, the White House proposed to include a record sum for the Pentagon and an additional $70 billion in funding for the wars in Iraq and Afghanistan, “while essentially freezing discretionary spending in areas other than national security, including most domestic programs” (NYT). Concerns deepened when the slowdown begun to affect the labor market. The government reported last week that the economy shed 17,000 jobs in January, the first monthly job loss in more than four years.

Nowadays, in the global world the US economic distress is no longer solely a problem in the United States but is spreading. “The concept of America as an island and everyone else being fat and happy is no longer clear”, said Joshua Shapiro, chief United States economist at MFR. (NYT) One of the most significant impacts of the US economic slowdown, as it has already been discussed in the class, may be the weakening of dollar positions in international markets. Today dollar lies in the basis of international markets worldwide. Each international transaction with the exception of the internal dials between the members of European Union carried out in US dollars. Thus, Russia pay for Chinese goods in dollars, Finland pay for Columbian fruits in dollars, and even Iran sells its oil to Turkey in dollars. This situation may be endangered and eventually dollar in the international market may be replaced by other currency, for example by euro.

If I were foreign correspondent working for example in Paris I will report how US economic slowdown affected French markets and stocks. In addition, I will probably report what problems may envisage French companies, which have business or export goods in the United States. Last, I will talk with American companies, which carry out their business in France. Despite generally negative effect, weak dollar has some positive effects especially for the American companies, which export their products outside the US. For example, when in 2000 one dollar was equal to one euro, a $20 000 Ford vehicle cost 20, 000 euro. However, now, when one euro costs $1, 46, the $20 000 American vehicle costs only 13, 698 euro; thus, it is more competitive in France.

Trusso Cafarello said...

A recession in the United States would translate in Iraq no long dominating headline news. Because Americans are mostly concerned with their financials and immediate environment, the economy would take the forefront and Iraq war would be pushed to the backburner. This is obvious in our class, the US economy dominates the topics. Financially the military spending may be cut. But this also depends on who is on office. Military spending is part of the budget every year so it probably would not impact the current budget.
The economy is a result of what has happened a year ago. It is a lagging indicator; chances are if there is a recession now it is due to events that have already taken place. For instance if the fed had cut rates over year ago we probably would not have been in a recession. Also the sub-prime is affecting lenders who are less likely to loan money out to individuals because they are high risk. We are a country based on credit thus consumer cannot buy houses or furniture. Big corporations would also be affected because they may not have the available credit to construct new offices, and no construction would affect the steel market.
Abroad, the economic status of the United States would affect manufacturers who provide the US with goods. The United is the largest consumer of worldly goods; if the US is not buying it would affect the economy of other countries, specifically China.

Trusso Cafarello said...

A recession in the United States would translate in Iraq no long dominating headline news. Because Americans are mostly concerned with their financials and immediate environment, the economy would take the forefront and Iraq war would be pushed to the backburner. This is obvious in our class, the US economy dominates the topics. Financially the military spending may be cut. But this also depends on who is on office. Military spending is part of the budget every year so it probably would not impact the current budget.
The economy is a result of what has happened a year ago. It is a lagging indicator; chances are if there is a recession now it is due to events that have already taken place. For instance if the fed had cut rates over year ago we probably would not have been in a recession. Also the sub-prime is affecting lenders who are less likely to loan money out to individuals because they are high risk. We are a country based on credit thus consumer cannot buy houses or furniture. Big corporations would also be affected because they may not have the available credit to construct new offices, and no construction would affect the steel market.
Abroad, the economic status of the United States would affect manufacturers who provide the US with goods. The United is the largest consumer of worldly goods; if the US is not buying it would affect the economy of other countries, specifically China.

Trusso Cafarello said...

A recession in the United States would translate in Iraq no long dominating headline news. Because Americans are mostly concerned with their financials and immediate environment, the economy would take the forefront and Iraq war would be pushed to the backburner. This is obvious in our class, the US economy dominates the topics. Financially the military spending may be cut. But this also depends on who is on office. Military spending is part of the budget every year so it probably would not impact the current budget.
The economy is a result of what has happened a year ago. It is a lagging indicator; chances are if there is a recession now it is due to events that have already taken place. For instance if the fed had cut rates over year ago we probably would not have been in a recession. Also the sub-prime is affecting lenders who are less likely to loan money out to individuals because they are high risk. We are a country based on credit thus consumer cannot buy houses or furniture. Big corporations would also be affected because they may not have the available credit to construct new offices, and no construction would affect the steel market.
Abroad, the economic status of the United States would affect manufacturers who provide the US with goods. The United is the largest consumer of worldly goods; if the US is not buying it would affect the economy of other countries, specifically China.

Danielle N said...

A slowing economy will have an adverse impact on most aspects in American lives. In regards to the War on Iraq, a recession might create a faster withdrawl of troops from the Middle East. As more budget cuts affect the lives of the public, they are going to be much less understanding of the enormous sums of money spent on deploying troops and arms to Iraq.

I believe I read somewhere that WWII helped to get the United States out of recession by providing jobs and also boosting moral behind a common cause. Unfortunately, this will not be the case regarding the War in Iraq. Support of the war has dwindled in the past years and further involvement sure will not raise peoples morale as they see their money becoming invaluable.

We already talked in class about how foreign investors are buying real estate in the U.S. and beginning to bail the U.S. out of trouble. Also, I could see the goverment relying on corrupt big businesses that will end up leading to corrupt foreign policy as we read about in "Endless Enemies."

If overseas as a foreign correspondent, the falling economy could have a large impact on my life as well. Travleing overseas is expensive and my publication may no longer be able to afford to keep me overseas. Also, travel would become more difficult with the rise of fossil fuel prices.

The United States is a consumeristic country so the odds that the economy could bounce back from its slump are good. If we can increase our spending again then the economy will be stimulated and businesses can boom.

Kim said...

Under the current administration, even though there is a recession looming and we are at war, there will be no tax increases or defense spending cuts. The war is too important to the president. Americans will start to realize how expensive this war is. Also, the rest of the world will watch us spiral into further debt. Our foreign policy, will want to create stability or at least relative calm with nations that we have current strained relationships. The U.S. cannot afford to have another war right now. The rhetoric will probably be taken down a few notches and diplomacy will kick in.

Unemployment will tick upward, as companies will not be able to support as many workers as consumer spending will decrease. The dollar does not have the same purchasing power and goods and services will cost more. I would be worried about my job as newspapers may depend more on wire services to cut costs. Another implication for me would be possibly less pay based on exchange rates. The prices of certain commodities would also be on my mind such as oil and wheat. I would want to know how much eating and traveling would cost me, so I could budget my money more appropriately.

If I were a foreign correspondent, I would be concerned with American businesses relationships with foreign partners and what foreign investors are doing with their American assets. Now would be a good time to buy into the market and looked for undervalued stocks.

I would look at the U.S. market’s influence on the global markets to report this story. Hopefully, I could find a specific foreign family or business to show the impact that the downturn is having on people around the world. I would want to know whether other countries felt the U.S. market was too risky or had not hit bottom yet. The mortgage crisis and credit crunch began months ago. I would also want to foreign financial analysts and weigh their opinions versus U.S. financial analysts. Everyone wants to know when the roller coaster in the market will settle down.

Bee Anne said...

Unfortunately I would count myself among the 61% of Americans who now believe that the United States has entered a recession. As much as I wish it wasn't true - as it is a self-fulfilling prophecy to some extent - the numbers for the fourth quarter and the continued lack of consumer confidence and problems in the housing market seem to leave no other explanation. Decoupling remains a myth, the downturn in the US economy will have a strong ripple effect throughout the nations of the world.

With regards to American policy, a recession has several implications, some of which we are already seeing played out. A stimulus package is being worked on in Congress to put some money back into the pockets of Americans. The fed has slashed rates dramatically in the last month. And the weakening of the dollar continues to draw foreigners and strengthen the US export economy. With imports becoming more expensive due to the devaluation of the dollar and the rising strength of other reserve currencies such as the euro and the pound, the domestic market also has the potential to expand because citizens will not be able to buy what they want abroad. We may very well experience gas and oil prices closer to those of the European countries - especially if Chavez makes good on his threats.

As a foreign correspondent abroad, it would be an interesting perspective to look at the home economy from the outside. One would think that a recession would lead to budget cuts and a speedier end to costly military engagements - however President Bush recently introduced the largest budget ever and McCain is saying that we may have troops in Iraq for 100 years. It would be interesting to note the way in which the mood in the United States has changed, particularly because we are in an election year. Suddenly, the economy has become top priority for the people, and therefore for the candidates as well.

If I were a foreign correspondent in Europe, for example, I might try and lighten the mood a little by doing a piece on all the ways the Euro will get you farther in the New York City real estate market or on your vacation to Vegas. It is by all means uncertain whether this downturn will be of a very serious nature, and it will be up to the consumers to decide in large part where we go from here. Less Americans would be using their discretionary money to travel, so there might be more of a demand for travel pieces as well.

On a more serious note, it is always fascinating to me how truly interconnected world markets are. To watch the DAX nosedive right after the DOW is really incredible. The best stories would probably be found by talking to people on the streets, in factories, schools, libraries, and shopping centers about how the weakening of the economy is affecting their everyday lives. I would argue it is very important for all of us to realize how interconnected and interdependent we are - and foreign correspondents can help create that culture by showing people that across the world, there are people being affected in much the same way as you. And of course theres always the angle that the foreign correspondent would be affected too (which is definitely legitimate as it would become much more expensive to keep people stationed around the world) but the people back home might not want to know that you could only have one crepe for breakfast at your Parisian sidewalk cafe instead of two.

Andy Heger said...

The possibility of a U.S. recession could result in several implications across the board. As far as the War in Iraq, a recession may cause the government to be forced to cut the already staggering rising costs associated with the War. This could allow for the war effort to be reduced more quickly, which could affect the policy of our next president. Therefore, some of the plans of the current administration would be hindered.

The effect of US recession on foreign policy is interesting. We have learned in class that overseas investors are starting to take advantage of US economic downturn and a weak dollar by buying into US companies. These companies are doing this to keep the economy going but the long-term implications could be hazardous. Foreign countries could be granted access to sensitize financial data and could begin to exert more control and influence over our properties, such as banks or financial institutions, which could make foreign policy more sensitive. We need the help, but will it be worth it in the end?

Also, trade relationships could be affected. With an economic downswing, exports to the US could become limited, which could affect the economies of other nations. This would in turn affect spending within those countries.

Unemployment would go up, as businesses would be prone to cutting costs and this would create a trend towards “thrift” as described in a story recently posted on this blog. Therefore, reinvestment domestically into this country could be limited, and this would call for, again, more foreign influence.

As a foreign correspondent, I would worry about some of the implications faced by people back in the States. For example, I would worry my employer would cut my job, because there is a trend to cut jobs in journalism. Also, the weak dollar would make it much more expensive for me to live regularly in a foreign county. Also, the rising costs of oil and fuel would make getting from country-to-country more expensive. Unless I am bringing excellent reports to my editors, it may be hard to justify my place in a news organization in a weak economy.

On the flip-side, a US recession could mean big reports and features on its effects on foreign markets and other economies which could make for interesting copy. In addition I would go to local businesses and foreign investors and discuss the US economic downfall directly with those who it affects most. Plus, I would interview foreign financial experts to get more global (unbiased?) perspective of this recession.

It is unknown if we are truly going into a recession, but with the indicators we have, it is good to discuss its impact now because of the major global effects it could have.

Sanford said...

I think the implications for the war in Iraq would be that funding will be cut short and it would slow things down and we could possibly pull out. OR we could put all our funds in the war and not worry about anything else. This government confuses me.

As far as unemployment and economic health, I believe that will take a turn for the worst. When companies can’t afford to pay employees, they are going to have to make cuts. The economic health of this country I think will stay the same because the rich will still be rich and the poor will be the only ones suffering from this recession. CEOs and such won’t lose their jobs. It would be the people working for them.

The implications for me as a foreign correspondent would be to worry if I would make it back home. If my company can’t afford to bring I hope I am covering wine in Paris (per Terry Anderson) instead of the war in Iraq. I’m not sure how I would report this. I would definitely do a lot of research about how things turned into this, and how American citizens could have caused this recession themselves by being so caught up in materialistic things. As a society and culture we live off credit, but when you can’t pay that money back you’ll rack up debt. And if you’re the government, you’ll rack up recession.

Heather said...

There are talks in Congress to increase the budget in Iraq. However, this is very unpopular among Democrats and much of the country as most people feel that funding should go to domestic issues like the economy. If the economy dips into a recession and our GDP is stagnant, this might leave Iraq up in the air.

The year is also a presidential election year. This might also change the direction our country chooses to focus on – domestic or foreign. The economy has been a key topic in the current presidential debates with Iraq falling behind. This might be a foreshadowing as to what topics might be important during the year.

However, it’s hard to predict what are all the implications facing the US and its foreign and domestic policies.

If I was abroad as a foreign correspondent being paid by an American company, I would be extremely worried about my current job. It costs quite a lot for a news station to send a correspondent to another country to report. I would also worry about the implications of a US recession and how it would affect the country I’m currently stationed in. If I was stationed in Europe, I would write articles about America’s current economic situation, how the US economy is playing into the elections, how the US recession is affecting the economy in the European country and what precautions the European country’s government is taking to not have a recession. Also with the poor currency rate, if I was paid in dollars I would be struggling to have a decent life (if I was stationed in Europe).

Amanda Teuscher said...

The actions of the United States and its self-perception are often defined by its economic health. The implications of an economic downturn, especially a recession, are incredibly far-reaching. Right now, concern about the economy is the major issue being discussed by the presidential candidates in both parties (notably, the main issue is not foreign policy). And considering a candidate’s stance on the economy could get her or him elected, it will also affect what the foreign policy of the next four years will be. Thus, other countries have a deep interest in following the state of the United States from a political standpoint.

Because the focus is predominately on the economy, Americans are going to want to see more work done on it; foreign policy, the Iraq War included, will take a backseat to domestic concerns. This may mean, especially if a Democrat wins the presidency, a decrease in defense spending and funding for the war in Iraq. Generally, the nation becomes more inward-oriented during times of political difficulty. As a foreign correspondent, it would be important to place this event in the context of the country of residence – how will it affect the people and the institutions of your host country? Tourism will certainly dwindle, but a U.S. recession may trigger more worldwide economic problems. Already banks in Europe have been running into problems because of the foreclosure crisis. It may also affect a foreign correspondent’s personal life. The weakening dollar means less purchasing power abroad; it could even mean a loss of a bureau for a newspaper, which is essentially a business just as susceptible to economic fluctuations. More materially, so many foreign economies are dependent on United States economic success, whether because of their exports or because their currency is tied to the U.S. dollar.

The job of a foreign correspondent is not always just to report objective facts, but to convey some sort of understanding of another culture, another way of life, another worldview. Something as far-reaching as a world-wide economic recession, perhaps triggered by a U.S. recession, is going to be interpreted many different ways. As a foreign correspondent, it would be important to not just tell readers what is happening, but give them an idea of how it's being perceived, and why.

Bethany said...

A recession seems like it would bring the war in Iraq to a much swifter end, although it is possible that the military will continue to get more funding as money for other departments decreases. A weakened economy could also have a negative influence on Americans in the war. A recession could leave the U.S. more vulnerable and make it seem like less of a superpower. Depending on how long this recession lasts, it could also influence peace settlements that the U.S. is involved in.

Some of these outcomes would also be seen in U.S. foreign policy. It might be less likely and less able to become involved in humanitarian or peacekeeping roles because of a lack of funds. The recession could also lead the U.S. to have a minimized role in the international market. Being able to buy and produce less could negatively impact the U.S. Surplus could also be an issue.

When demand goes down, supply must follow. This often leads to leaving open positions unfilled or making layoffs. If the recession lasts long enough, unemployment could rise dramatically. Of course, this starts a vicious cycle: if people aren’t making purchases, companies will have to lay off workers to make up for lost profit, and then the workers will not have the money to make purchases and re-stimulate the economy.

If I was working abroad during a downturn of the U.S. economy, I would be affected in several ways. In addition to worrying about my home country, I would also worry about my fate upon my return. How would exchange rates affect my finances? We already know that journalists don’t usually make high salaries. I would be curious to see if the dollar becomes more devalued, and how foreign markets dealt with this change.

To report such a story, I would try to take more of a human interest angle instead of a purely analytical one because that is where my strengths lie. I think it would be interesting to compare and contrast the effects of a U.S. recession in two different countries. I would like to interview people of similar statuses – two doctors or two small-business owners for example – in both countries to show how a U.S. recession would affect people with different markets and currencies. Another angle or even a possible sidebar could be ways to avoid some negative aspects of a recession.

Karen said...

A recession would be difficult on the American population. Not only (through taxes) are we supporting countless programs in America, but there are many things abroad that our taxes support as well: the war in Iraq, Afghanistan and a military presence in bases around the world. I do no think funding would be cut in these areas. I believe the government would be able to reallocate money from other areas—probably environmental ones, to help keep the Middle East wars full speed ahead.
I do believe the administration would use the opportunity of a recession to push to open protected lands across the country, especially in Alaska, to drill for oil. Drilling in the Chukchi Sea is being debate this week, and the decision whether to drill or not depends on what endangered classification the polar bear receives. I think with the economy plunging legislators would push us to save money by tapping into the resources that lie beneath the soil of America.
If I were reporting in Chile, I would report on what the economic downturn means for Americans abroad, (and in Chile) and if and how it is affecting Chileans. As a reporter I would want to have a variety of people to interview, government officials to people walking on the street. That is, if I still had a job. One of the things my news organization might do is pull resources and limit the number of correspondents, or I might be relegated to one area, to try to keep travel costs downs.
The same would happen in jobs across America. Unemployment levels would rise, and workers benefits would suffer. Not only in the form of savings and retirement spending, but traveling and other business expenses would be reduced. At National City Bank this past holiday season, the bank announced in order to try to save money, the company would not support or host holiday parties for workers. They were already facing tough economic times, and this was before the economy took this latest downturn.

Jourdan said...

The war in Iraq will be the central debating point for the upcoming election. It's the economy, stupid, and presidents can't get away with doing what they want when the economy is in a recession. People will stop being so scared of boogie men and started counting how much is really going into this lost cause.

U.S. foreign policy is obviously going to adjust. We'll have to be kinder, because we're not wielding the big, fat American dollar.

Unemployment was screwed up enough by G.W. Of all the jobs he let leave this country, the 'growth' of employment came in low-wage jobs. For every computer technician sent to India, three McDonald's opened. Hopefully, this will be a huge election issue, as well, forcing people to develop jobs and get government loans to invest and start businesses.

I would report on the effects the U.S. economic downturn is having on the country I'm covering. The U.S. dollar is gold in most countries (at least it used to be); we need to discuss the effects of having the security blanket pulled out from under you; the possibilities of these countries economically without big papa U.S.

Trusso Cafarello said...

For some reason I had problems posting the whole response that I wrote last night. Hopefully it works now. . .here is the full response. . .
A recession in the United States would translate in Iraq no long dominating headline news. Because Americans are mostly concerned with their financials and immediate environment, the economy would take the forefront and Iraq war would be pushed to the backburner. This is obvious in our class, the US economy dominates the topics. Financially the military spending may be cut. But this also depends on who is on office. Military spending is part of the budget every year so it probably would not impact the current budget.
The economy is a result of what has happened a year ago. It is a lagging indicator; chances are if there is a recession now it is due to events that have already taken place. For instance if the fed had cut rates over year ago we probably would not have been in a recession. Also the sub-prime is affecting lenders who are less likely to loan money out to individuals because they are high risk. We are a country based on credit thus consumer cannot buy houses or furniture. Big corporations would also be affected because they may not have the available credit to construct new offices, and no construction would affect the steel market.
Abroad, the economic status of the United States would affect manufacturers who provide the US with goods. The United is the largest consumer of worldly goods; if the US is not buying it would affect the economy of other countries, specifically China.
If we are in a recession it may attract more foreign investors. Big Banks, money centers, Citi group received a huge infusion from banks abroad. It would be an opportune time for foreign countries to invest in the US, buy low sell high.
In the economy every loss has a profit; if the recession resulted in a lower value of the dollar, as we are seeing now, I would cover the story of how it is the best time for other countries to invest in the United States; more tourists could come to the United States and shop till their heart’s content. Also exports would also increase possibly resolving the large import surplus. In fact this is happening now more foreigners are now coming to the United States to buy real estate.
Or possibly as reported in the New York Times, a recession may mean that the foreign bureau I am working for has to close in order to keep costs down, so there would not even be a story for me to cover.

Jennifer said...

The U.S. could be changing its position in Iraq with the economy doing poorly. Support has already decreased and once the economy really begins to show its affects, those with the power and wealth will influence the government to pull out troops. Up until now the war has really not affected anything in the U.S.—at least nothing and no one of importance. If we continue to spend the money we don't have to support a war, most people will actively seek a new position.



Our foreign policy may change as well. In order to get out of a recession the U.S. will need to spark the economy in some way. Foreign trades will help to bring more revenue, but to do them the U.S. needs to improve relations with other countries. I could see us becoming more agreeable, but on the other hand we could decrease relations with other countries. This would bring back organizations and businesses that have moved abroad, thus bringing jobs and local economies.



To decrease unemployment and increased health care, the economy has to be doing well. When the economy is at its best, unemployment is down and the government is able to distribute more money for health care. If the government is in recession, there are bound to be less jobs and cuts in health care spending.



As a foreign correspondent, I would report the economic recession by finding the little ways our recession affects the rest of the world-- a small, but significant story that not many people would cover. For instance, maybe I would check within the tourism industry and interview hostel or hotel workers to see a change in rates. I would find opinions—good and bad—about the affect of the economy on foreigners.

Samantha said...

It is no question that the U.S. economy is slowing, but it may be too soon to tell if we are in a recession. If we are, there are huge implications for our own foreign policy, as well as for the global economy. However, there is always the fact that capitalism is a cyclic institution and will right itself in the long run. Currently though, a recession would have a big impact on the War in Iraq. Bush had proposed an extraordinary budget for Iraq a week ago, I believe. Increasing the amount of money for the War in Iraq will probably be one of the first things to go. It is already an unpopular war led by an unpopular leader and the country will most likely try to bring back troops sooner rather than later. As for U.S. foreign policy, less money means less ability to influence other countries. The U.S. may have to be more diplomatic in the coming years as other countries close in economically. It is no secret that money and political clout run hand in hand. Our imperialistic way of influencing other countries by invading and implementing our own democracy may not work in the near future. As seen in Iraq, it obviously drains our funds to even attempt to do so.

As for the unemployment rates and the overall economic health of the U.S., this is not the end of our country. We are not going to perish into third world living conditions. However, as it true with most recessions, unemployment will increase and the country will have to find a way to improve its economic health. A factor that will be to our advantage is the effect that the U.S. economy has on other countries. As our banks and economy suffers, so will Canada, China and western European countries. Most countries are interested in a strong American economy. Some will be looking to capitalize on our vulnerability, investing heavily.

As a foreign correspondent, I would first look at the effects of a U.S. recession on other countries. Who does it benefit? Who will suffer? What opportunities will arise for investment in U.S. companies? Personally, my job as a foreign correspondent could be made much more difficult if the U.S. fell into a recession. Already, newspapers of all sizes are pulling foreign correspondents as profits decrease and layoffs occur. As a foreign correspondent reporting during a recession, I could expect less pay, less networking capabilities with other U.S. reporters in foreign countries, and possibly fewer sources if the U.S. press is not considered an object of influence anymore.

shutts said...

Melissa’s (and other people said the same) point is an important one to consider. Foreign correspondents can feel the effects of a recession firsthand (as one of the other articles on this site points out, the number of correspondents are down) as they are expensive to maintain. How does this affect the amount and quality of international news that Americans receive?
As a foreign correspondent, a recession would spark lots of questions, starting with economic ones, but spreading out to social and political implications. How would a U.S. recession affect export-reliant countries such as China? How would a recession affect the economies of other countries, tied closely to the U.S. in a global market? What about countries tied to the dollar? Socially, how would a recession affect the habits and lifestyle of people? Do foreigners continue exploiting a weak and weakening dollar? What about countries reliant on U.S. tourists for a large part of their revenue? Do Americans stop traveling? Politically, a recession is obviously a huge domestic issue, and American voters place it high on their list in choosing a candidate for the upcoming election (many above terrorism or healthcare). But as a foreign correspondent, the question is: how does a recession affect foreign policy? Do Americans increase pressure to stop spending money on Iraq? Does this pressure increase as domestic programs face shrinking budgets? How does a recession change immigration statistics or immigration policies? A recession impacts all facets of life, and it has been predicted that slowdowns in other countries would follow a severe U.S. recession.

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