John Phillips

Soc 204 – 102
Social Problems
Professor Gabrielle

Overview: With the economy in its current position, there was a lot to be covered on an evening's worth of CNN news. The information dates back to March 16th 2009, and was discussed by Lou Dobbes, Larry King (with special guest Judge Judy), Campbell Brown and Wolf Blitzer.

Content: The full evening of CNN will be discussed in the following responses, divided into the Economy on a more micro level, the bailout status (starring AIG) and international relations including Russia and Mexico.

	 The underlying issue behind any current event is the state of the economy. In fact, the word “economy” has become a trigger word in a sense, used more readily than ever. It's on the top of people's minds all over the world, and this is reflected in the news. We are reminded of this condition every day through the decrease in jobs and job security, and the decline of business worldwide. Aside from the obvious losses, however, CNN took the time to observe the less obvious effects of a bad economy.
	Because crime rate is directly related to poverty, it is no wonder why America is seeing an increase in crime. Not only are the poverty stricken directly driven to crime by sociological definition, but with little city funding, programs to guide the youth are often the first to go, leaving them on the streets to wreak havoc. Many experts say that stimulus money could be used to boost such programs, to keep poverty stricken teens off the streets, in hopes of steering them away from criminal habits.
	Another problem derives from the stress caused by the bad economy. The American Psychological Association states that 8 out of 10 Americans are stressed about the economy. In excess, stress leads to insomnia, anxiety, and many other disorders requiring prescription drugs. Last year, doctors wrote $56 million worth of prescriptions. This is a 7% increase. Campbell Brown interviewed a man who had a year worth of money, and no sign of any type of new income. This was a man who refused even to take medication for head aches, but found himself on stress relief medication so that he could even sleep at night.
	Through the e-mails received to Wolf Blitzer in “The Situation Room”, it was concluded that the effects of a bad economy might actually be magnified by the continuous news coverage of the situation itself. When it is drilled into the heads of Americans that the economy is not safe or secure, they are less likely to spend, and preserve the economy's bad state. This also adds to the stress factor. While bad news certainly does sell, it would be nice to hear a little optimism, even if nothing more than for the sake of our own morale. It is only through negative emphasis that a bad situation becomes a crisis, as it so clearly has.
	Some experts, according to the Wolf Blitzer, say that the recession will “probably” come to an end this year. Experts say that different aspects of the economy are affected in different timing, and the indicators often lag behind the actual progress of the economy. For example, the Special Sector is the first to be effected, followed by the Lending and the Housing Market. The job market lags quite a bit further behind, and may continue to go down for a few months, even after the economy is well on its way out of the recession.
	One of the large debates on where government spending should go is between big and small business. Big business is viewed as more stable, and more directly impacting the economy. It is the small business, however that refine the porous nature of big business, and relate more directly to the people and the American Dream. In his appearance on Lou Dobbes, Jeffery Miron stated his opinions against helping small business. “Small business should not be focused on just because it's small,” he says. “Small businesses are too fickle, they come and go.” He concludes by saying that relief money should target more of what could be deemed a “practical investment”.

	 In the recent years, America has developed the trend of bailing out failing corporate giants. Under the notion that the companies play a role that is too large in our economy for the government to simply allow them to fail. Latest in this new chapter of American economics are the American Automobile companies, followed by AIG. The idea of bailing out a company seems to go against our own moral fibers as Americans, as our economic environment is traditionally very cold blooded. The reasoning of the U.S. Government behind such bailouts is that the economy would suffer broad damages, were those businesses to go under. Lou Dobbes showed an excerpt from a presidential speech in which Obama had said “I believe the nation that invented the automobile cannot walk away from it.” This quote indicates not only practical economical reasoning, but also reasoning based on values and pride. On this same subject, Clips of Rush Limbaugh were shown many times that evening, in which he said "I want Barack Obama to fail if his mission is to restructure and reform this country so that capitalism and individual liberty is not its foundation! Why would I want that to succeed?" On the subject of President Obama's dealing with the Auto Manufacturers, a public rating of 46% was received.
	Next on the list of bailouts is the infamous AIG. Now discussed in detail by all programs with any obligation to economics, AIG, an international insurance giant faced going under, until of course American tax money bailed them out of it. While there are very practical reasons why the company should be kept around, it seems almost irresponsible to provide a safety net for the kind of recklessness demonstrated by AIG management. There were no legitimate external circumstances that led to this downfall, it was merely a matter of poor operation. Like many businesses do, AIG took a risk, and a very large one. Unlike those other businesses, however, their size saved them from the repercussions of their gamble. They received 170 Billion dollars from tax payer money to bail them out of their debt.
	The bailout was clearly an outrage to many, but what brought out the anger of most of the public was the amount of bailout money used to pay large sums of bonuses to the management of the company – many of which were responsible for the very collapse to begin with. 160 million dollars of the bailout money was given in the said bonuses. Obama did angrily oppose those bonuses, but from this arose a rather tricky question: Does the U.S. Government have the authority to deny these bonuses? In a letter to Secretary Geithner, AIG presented two arguments supporting the bonuses. The first argument was that the company was contractually bound to pay these bonuses, and would suffer serious repercussions were they to fail to meet them. To counter this argument is simple. Were AIG to go under without U.S. Support, how would they pay these grants anyway? The second argument stated that AIG “cannot attract and retain the best and brightest talent to lead and staff the AIG business if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.” As you might expect, Jack Cafferty had the argument covered. “Can’t attract the best and brightest? Best and brightest what, the company’s in the toilet. I mean the people running it have run it into the ground, and we’re on the hook us tax payers for hundreds of billions of dollars with these clowns and we’re supposed to pay bonuses to these people? You don’t have to be a politician, that flies in the face of elementary logic a third grade could understand.”
	The idea of the bailout extends even to a smaller scale, including such cases known as the “Octomom”, as named by the media. Here's a woman who already had six kids, three of which were disabled. Judge Judy, special guest on Larry King Live noted that it is irresponsible to have even one kid in this situation, let alone put your self in a situation where you could have as many as eight. It's just another situation in which the consequences of poor decision making are covered by American Taxpayers. What kind of message does this send?

	The last major issues that were frequently discussed on CNN that evening were those of international relations. As usual, the topic of Iran's nuclear program came into discussion on and off. The main topic discussed, however, was Russia's latest military installment. They were able to obtain permission to station bomber planes in Cuba, as well as La Orchila, Venezuela. These territories are literally minutes away from American territory, which led to some unrest. The situation is comparable to the Cuban Missile Crisis. These bombers pose a very large potential military threat to the United States. Experts interviewed on the Situation Room stated that these actions are more symbolic than anything else, that Russia merely wants to find enemies to justify the expansion of their military to their people. Stephen Pifer seemed to believe that Russia merely wants to show the world that they still do have valid international military power in this world. The consensus between those interviewed seemed to be that Russia wanted to emphasize their military strength by showing the world they still have power to instill fear in Americans.
	Mexico was the second country talked about in the subject of international affairs. The United States have recently cut a program that allowed Mexican trucking companies to travel deep into United States territories. Considering the damage this caused to the Mexican economy, the Mexican Government retaliated by adding tariffs to over 90 exports. This summoned a great deal of outrage within the American people. When polled, 97% of Americans said that the U.S. Government should retaliate those tariffs. This event particularly grabbed my attention, as I was unaware that policies were carried out in this manner. This does not come off as the way politics ought to be run. To act out of spite, battling in a sense with other countries, seems rather unproductive politically. Rather than creating policies that may actually benefit a country, attention is focused rather on creating worse conditions for competing countries. In this event there really are no winners, as both countries are worse off than they started.
	The international affairs discussed that particular evening seemed rather petty, compared to all else that was going on. Between Russia's symbolic military campaign and a feud in policies between Mexican and American Governments, international news was done and focus was back to AIG.