The Disunited States of America

Oct 15

My assigned term paper topic in Managing in a Global Economy was The Disunited States of America. The question posed was whether or not it could happen. I explored this from economic and ideological perspectives, drawing on the American Revolution and the Civil War as historical precedents. In both cases, economic pressure was the primary driver in favor of secession. Ideological division exacerbated existing economic tension. My conclusion from the paper is that it’s unlikely to happen, at least sometime soon. Secession in the United States is possible, but very improbable. Arguments that the government has failed in its constitutional duties and secession is the most logical course fail to capture the most likely outcome: increased economic hardship and decreased opportunity in a shrinking global economy. The economic costs and risk of global fallout is so high that a rift is unlikely to occur until conditions domestically deteriorate to a point that a significant proportion of the population believes there is no possible way to reform the existing government. Historically two very strong precedents for secession include the American Revolution and the Civil War. In both cases, economic duress was the dominant driver leading up to the conflict that brought secession. Secondary ideological divisions, of liberty in the revolutionary conflict and slavery leading up to the Civil War, compounded economic pressure, but were not sufficient on their own to lead to secession. Here’s a prezi I created to present my term paper to my class, followed by the actual term paper. Download The Disunited States of America Here’s the handout I used along with the presentation. It’s a short quiz on economic aspects of the constitution. I’ll put the answers in as a comment after the presentation. Download the...

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2011 Arab Spring

Sep 25

Events on December 10, 2010 in Tunisia would quickly reverberate around the world, and more especially throughout the Arab world. Citizens of Tunisia began a series of protests which led to the downfall of their government about one month later. Political prisoners were released and government agencies, including the police, were disbanded. Elections followed in which the people elected officials to a representative assembly. Similar uprisings then happened in rapid succession throughout the Arab world with similar results. This has come to be referred to as the Arab Spring. Freedom vs. Economics There has been a lot of discussion about the instigating factors for each uprising. Both economics and desire for freedom have been suggested, and both have some merits. Economically poor circumstances frequently lead to unrest. However, more likely than a desire for democracy is discontent with local governments. Economic difficulties Since the uprisings, economic circumstances have not improved. Much of the infrastructure and stability present before the protests has crumbled. Forming a new coalition government takes time, as does establishing infrastructure and stabilizing currency and trust in external markets. In some countries there have been additional protests and in the case of Egypt, newly elected officials have been removed from office by the military that allowed the initial transition. The result is an economy without foundation and a people even more under pressure than before the uprising. Sectarian divide In addition to the economic strain that both led to and continues with the Arab countries is a sharp division between religious sects. Many of these divisions are specific to different forms of Islam and go back many centuries. Existing cultural tensions related to sectarian differences have been intensified through the process of elections and attempts to find a common ground. The power vacuum left by the fall of these governments has become a breeding ground for continued confrontation, adding ideological disparity to the existing economic and social difficulties. While many have celebrated the Arab Spring as a rebirth of freedom and opportunity in the Arab countries, it’s important to note that it is in the very early stages of development. The initial protests are likely to be repeated, and they have been in some cases already. If...

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The People’s Republic of China

Sep 24

Along with the general focus on geography and culture as they impact contemporary business, I had the opportunity to write an in depth paper on China and prepare a presentation for my class. China is a dynamic and complicated country. They have increasing political and economic leverage, while at the same time eroding their natural resources and polluting their environment. Growth is always complicated, and the pace they’ve maintained is even more challenging. See my findings below. The People’s Republic of China – Presentation The People’s Republic of China – Handout The People’s Republic of China Download The People’s Republic of China – Handout Download The People’s Republic of...

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Dangers of Euro Exit or Devaluation

Sep 18

The European Union, comprised of 27 member states, may be considered together to represent an economy larger than the United States. Globally the European Union represents about 20% of the global economy (based on the CIA World Factbook). Over the last decade and a half, 17 of those member states have adopted the Euro, a common currency intended to make commerce between member states and global partners easier. The countries that have adopted the Euro are sometimes referred to as the Eurozone or Euro area. The four largest countries to adopt the Euro are Germany, France, Italy and Spain. Together they account for 76.6% of the GDP among the Euro member states. Other countries that have adopted the Euro range in size from the Netherlands on the higher end to Malta on the lower end. In terms of languages and cultures, there is a large diversity. In matters of perceived power distance and individualism, there are significant differences between member states in the Eurozone. These differences factor in to various aspects of risk, including risk of Euro abandonment and devaluation risk. Power distance and individualism have a significant impact on the political process and the social circumstances that influence currency decisions within a country. Specifically, these can range from austerity measures imposed for financial assistance to political ideology that shapes negotiations. The impact of any country moving away from the Euro could range from disruptive to catastrophic. The magnitude of that range is expected to be proportional to the size of the economy that leaves. This means that a larger economy, like Germany, would have a more profound impact, while a smaller economy, like Malta, would have a lesser impact. However, even a smaller economy exiting the Euro, like Malta or Greece, could have a destabilizing effect far more significant than their proportional representation within the Euro. The two scenarios under which this might happen include a country electing to leave the Euro and the EU member states ejecting a country from the Euro. There are various ways that this could happen, the most probable relating to politics and social pressures. Devaluation of the Euro, also referred to as the collapse of the Euro, due to unchecked debt and general default...

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Colombia’s New Country

Sep 10

In some ways the history of Colombia as it is known today began in 1830 following the collapse of Gran Colombia, an event which saw Ecuador and Venezuela emerge as separate countries. Even after the split, it remains the only South American country with coastline on both the Pacific and Atlantic Oceans. Drug Trade In recent decades, there has been much instability throughout Colombia, especially from the insurgent group Revolutionary Armed Forces of Colombia (FARC), which is heavily funded by the drug trade. The country is considered to be the world’s largest cocaine producer. The fact that the population of United States of America is among the top consumers of illegal drugs in the world, many US dollars flow into the country every year. Some estimates put the figure in the multiple billions of dollars annually. In spite of the extensive funding at the disposal of insurgent groups, they still lack the military and popular support necessary to take control of the country. As a result, violence has actually decreased over the last decade. While the decline in violence is a promising trend, there are still regions of the country under insurgent control, a problem that has been exacerbated by the demobilization of the United Self Defense Forces of Colombia (AUC) around 2006. In the resulting vacuum of power various insurgent groups came to fill some of the gaps. Continual instability within Colombia has led to tensions with its neighbors over concerns that the violence will spill over their borders. In very recent years the Colombian government has escalated its efforts to restore government control throughout the country and within its own administrative departments. A Peaceful Colombia Regional interests in peace and Colombian government efforts toward better control have encountered continual resistance. US consumption of illegal drugs and the enormous flow of US dollars to the insurgent groups who are responsible for the drug trade present a multifaceted problem. Money flowing into the country is not benefiting the economy of Colombia directly. Instead it is benefiting a very few who participate in the insurgent activities or provide services and products to them. The insurgents have more purchasing power on the global stage due to the position of the US dollar...

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