Wildfires Create a Worsening Insurance Crisis in California: What can be done?

Wildfires have long been a part of life in California, but in recent years, their severity has increased dramatically, and the wildfire season has grown longer. In July, the Park Fire ravaged 429,259 acres across Butte and Tehama counties. By early September, three more fires erupted in Southern California, destroying 200 structures as of this writing. Wildfires have become so frequent and intense that Cal Fire reports this year alone, 992,000 acres have burned, and 1,229 structures have been lost. As wildfires worsen, both state and national leaders are proposing solutions.

A Firefighter battles the Airport Fire in El Cariso (11 Sep. 2024)

In 2020, President Donald Trump commented on the issue, suggesting, "You gotta clean your floors, you gotta clean your forests — there are many, many years of leaves and broken trees, and they’re so flammable, you touch them and it goes up.” Solutions like forest management, as Trump mentioned, or addressing climate change are being debated, but the reality remains that wildfires are growing in intensity, leaving Californians to bear the consequences.

Many insurance companies have responded to the wildfire crisis by withdrawing from California's high-risk areas. Major providers, such as StateFarm and Allstate, have stopped issuing new policies in fire-prone parts of the state, leading to an insurance crisis. Homeowners in these regions are left with either overpriced policies or no insurance at all. StateFarm cited "rapidly growing catastrophe exposure" as the reason for its decision, while Allstate noted that "the cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires."

Existing policyholders are also being affected. A homeowner in San Ramon received a letter from Liberty Mutual stating that his coverage was being dropped due to the "condition of property," specifically citing issues with "Roof-Algae/mildew/mold/moss." Despite his efforts to challenge the decision, the homeowner received no response. Similar cases are occurring across the state, as insurers seek to limit their exposure to high-risk properties, further exacerbating the insurance crisis.

In response, California's state leaders are exploring solutions. One effort involves the creation of a public catastrophe model designed to predict wildfire risks and impacts on properties. Officials argue that this state-led model will offer a more balanced approach than private models, which often overestimate damages and drive up insurance costs. California Insurance Commissioner Ricardo Lara has also proposed a series of regulatory reforms aimed at stabilizing the insurance market. His plan includes expediting the insurance review process and expanding the state’s FAIR Plan, a last-resort insurance program that provides basic wildfire coverage. Critics, however, are concerned that these changes favor insurers and leave too many loopholes. Carmen Balber, executive director of Consumer Watchdog, argued that the proposed reforms fail to address key consumer concerns.

As the wildfire-driven insurance crisis continues, the question remains: what more can be done to protect Californians from these escalating risks?

Sources:
https://www.politico.com/states/california/story/2020/08/20/trump-blames-california-for-wildfires-tells-state-you-gotta-clean-your-floors-1311059
https://ktla.com/news/california/wildfires/southern-california-wildfires-are-being-contained-but-there-is-still-lots-of-work-to-be-done/
https://www.fire.ca.gov/
https://www.theguardian.com/us-news/article/2024/aug/10/home-insurance-park-wildfire-california-butte-county
https://www.nbcbayarea.com/news/california/how-to-weigh-in-on-californias-plans-to-reform-the-insurance-market/3653448/
https://apnews.com/article/california-wildfire-insurance-e31bef0ed7eeddcde096a5b8f2c1768f
https://calmatters.org/economy/2024/09/california-insurance-crisis-lara-interview/
https://www.sfchronicle.com/california/article/home-insurance-wildfire-model-19768876.php

Trump Brings a 9/11 Conspiracy Theorist to the 9/11 Memorial: A Slap in the Face

Written by Thomas Williams, posted by Mr. Silton

Yes. The title is correct. This 9/11, former President Trump brought Laura Loomer, a woman famous for spreading the myth that 9/11 was an inside job, to the 9/11 memorial on its anniversary. The one question I have is, what was he thinking?

Trump has met with Loomer before, in 2023. He met her at a golf course in which upon seeing her called his assistant to immediately pay for all of her purchases, along with bringing her to his private suite for a day. This action was criticized even in 2023, because while Loomer received a whole day with Trump, Iowa voters received just one hour.

Laura Loomer has repeatedly spread racist comments about muslims and made appaling remarks about others who aren’t white. She has used her platform to spread racist myths about a tragedy that has killed 100s. She has taken refuge in a racist circle that has tried to overthrow the very government itself, and yet gets free golf trips and a private suite. Loomer, by all accounts, is not a good person.

Now, why 9/11 of all days to bring a conspiracy theorist to the very memorial she conspiracizes? Trump’s advisor of course only stated that this memorial wasn’t about Loomer, and instead only about those who died in the tragedy, but Trump himself said nothing. Well personally? I don’t think the why matters. It’s just a slap in the face, and an action that should be condemned. 

His action is ridiculous, and represents a very important thing to take notice of - what news is not covering it. CNN, the progressive media giant, of course took this chance to cover a politician their viewers don’t like. Fox, on the other hand, had no reporting at all. Narrowcasting, polarization, poison in our society. How so? When our very media is covering for the insults their idol is acting on, it only further divides the country. Now, only left-wing viewers even know that this happened. If a left viewer gets into a discussion with a right viewer about this situation, the right isn’t even going to know about it! How can we, as a democracy built off of educated and civil commentary to discuss issues, discuss an issue half of us don’t even know about?

We need to hear from both sides, because people should not be able to do things like this without criticism.

Sources:

https://www.cnn.com/2024/09/12/politics/laura-loomer-donald-trump-influence/index.html

https://www.thedailybeast.com/lindsey-graham-warns-trump-to-stop-palling-around-with-toxic-laura-loomer

https://www.foxnews.com/politics/trump-fawns-very-special-laura-loomer-new-video

https://www.hindustantimes.com/world-news/us-news/who-is-laura-loomer-republicans-wh-warn-trump-against-closeness-with-conspiracy-theorist-who-spreads-racist-poison-101726203917096.html

https://www.thenation.com/article/politics/trump-laura-loomer-loomered/

https://www.nbcnews.com/politics/2024-election/far-right-activist-laura-loomer-access-trump-crisis-campaign-rcna170915

Written by Thomas Williams, posted by Mr. Silton

Taylor Swift endorses Kamala harris after historic debate; Trump responds aggressively

    The debate was watched by millions of people last Tuesday. Of those people, was international superstar Taylor Swift. Minutes after the debate, Swift took to her instagram to throw her support under current Vice President, and Democratic Nominee, Kamala Harris. Having not publicly disclosed her support for any presidential candidate since endorsing Biden in the 2020 election. Her hidden opinions were the cause of criticism as well as speculation as to which party she was planning to vote for due to her ongoing political silence. Ms. Swift discredited any rumors with this formal endorsement; ending the discussion by confidently expressing “I’ve done my research, and I’ve made my choice”, before urging eligible voters to register and participate in the upcoming election. Swift posted this message alongside an image of her holding her Cat and comically signing off as “Childless Cat Lady”, a riff-off of JD Vance’s comment that the country is run by a “bunch of childless cat ladies” who are completely “miserable”. With this final jab mocking an integral member of Trump’s campaign, Swift further distanced herself from the false reports of her supporting Trump and his running mate. 

                                

Unsurprisingly, this endorsement, wringing in mounds of attention and comments from the star’s two hundred eighty four million followers on Instagram, was met with a negative response by the Trump campaign. Following her post, the former president’s administration released new shirt designs, in a copy-cat style to the main shirt sold on Taylor Swift’s billion dollar grossing “Eras” tour. Only now, Swift’s iconic design was replaced with Trump’s name, and face which is currently on sale for thirty six dollars on his official website. The timing between Swift's announcement of her support for the democratic party, and the release of the T-shirts, appear too close to be coincidence; as it is obvious a celebrity endorsement of her caliber to the opposite party, would create tension nationally, and harm his campaign at a high-stakes point of the election process.

Although Swift has not responded publicly yet to Trump’s promotional marketing that has attempted and has for the moment succeeded at stealing her image at his benefit; ironically this behavior is what caused her to report the endorsement in the first place. At the moment Taylor Swift is regarded to be one of the most influential celebrities in the world, with her fan-base having a cult-like following to the brands, trends, and ideas she supports. Her voice, and her messages are amplified by a hundredfold due to her enormous fan-base; which although is dispersed globally, majority of her fans, like herself, are Americans. Due to this concentrated influence in the U.S. as the election has neared, more and more fake-news, sensationalized media, and deep fake AI videos which together have collectively spread misinformation about Swift’s voting intentions. In her initial message, she voiced her concerns about these falsehoods which misrepresent her values, and only worsen the media age and political tactics of disinformation.

The last that has been heard from Trump on this matter, has been his recent lash out on Truth social, in which in all caps, he posted “I HATE TAYLOR SWIFT”. Although the message lacked surrounding context, this newfound aggression is without a doubt tied to last week's endorsement; revealing the weight of Swift’s message, the effectiveness of her controlled means of communicating with the public, and the impact transparency of public figures has on the political landscape.

Sources: https://www.msnbc.com/top-stories/latest/taylor-swift-trump-shirt-eras-tour-rcna171149

https://www.washingtonpost.com/politics/2024/09/15/trump-i-hate-taylor-swift-harris-endorsement/

https://www.forbes.com/sites/petersuciu/2024/09/16/donald-trump-posted-i-hate-taylor-swift-what-did-he-expect/

https://www.vanityfair.com/hollywood/story/jd-vances-childless-cat-ladies-remark-was-a-reliable-punchline-at-emmys-2024

Melania Trump instigates conspiracy theories in a series of published videos

Despite only making a handful of public appearances throughout Trump’s presidency, and regardless of her backseat approaches towards and throughout her husband’s presidential campaigns; former first lady Melania Trump has appeared in the limelight, in a misleading effort to promote her new memoir,“Melania”. 

The Trump family is no stranger to intentionally spreading and distributing first-hand lies, misinformation, and conspiracies to the media and the public. With the thirty-four felony count, and twice impeached president himself hiding under the guise of “fake news” countless times in pivotal points of his political career. Recently, in a crucial time preceding and following the presidential debate, and upcoming election cycle, Melania has mimicked this outlined approach. Releasing a series of cryptic and concerning messages all at politically convenient times for her husband's campaign.

Mrs. Trump has been incrementally posting video clips, which her husband, and his supporters have been recirculating rapidly. The first of the videos, is a thirty four second clip depicting a stone-faced Melania, dressed in all black, with a dark backdrop, opening with a statement on  her “horrible and distressing” emotions around the attempt on her husband’s life. Although this grief is valid in abstraction, Melania quickly loses credibility and sincerity, by using such statements to allude to conspiracy theories surrounding her husband's assassination attempt; raising vague questions regarding law enforcements “failures” on arrests before ominously stating there is “definitely more to the story”. After this publicly important information is discussed, a pre-order link to her new memoir is flashed on screen, revealing the driving force behind such emotional statements to be strictly promotional, and for publicity reasons only.

In another stylized video released after Trump’s disappointing performance in the presidential debate, Melania shares a dramatic excerpt of the Fourth Amendment, bringing to attention the claimed invasion of “privacy”, that happened through a search on her husband's home. In actuality, this apparent transgression by the government, was due to the families unlawful possession of classified documents which Trump was found liable for in court. This dubious interpretation of the constitution, like the other claims made in these obscure videos, are ultimately harmful to the flow of truthful information, trust in government, and public interest.  

It is vital to note that Melania Trump isn’t just anyone, she is a former first lady, her statements  and status hold weight and significance to the public. Whether it be by illuminating subterfuges, or attempting to reduce clauses in the constitution, this vague and deceitful wish to “uncover the truth” implies that there is a form of secrecy and corruption within the government. This false idea, especially when expressed by individuals such as Ms. Trump with high authority, only harbors more mistrust within the broken political scene; thus, worsening the era of misinformation and disinformation. Moreover, the fact that each of these videos ends with a redirection to her website and image of her book shows there is a clear, and traceable monetary motive behind these strategic announcements. 

Whatever the “memoir” itself contains, is up to interpretation and speculation; however, the means of promotion have been criticized by public figures, and media outlets as misleading. Furthermore, it is expected that videos of a similar fear-mongering style, and content will be continuously delivered up until the book release. 

Sources: 

https://www.theguardian.com/us-news/article/2024/sep/10/melania-trump-memoir-assassination-attempt

https://www.theguardian.com/us-news/article/2024/jul/15/trump-shooting-shows-conspiracy-theories-not-confined-to-right-wing

https://www.cnn.com/2024/09/05/politics/melania-trump-memoir-video/index.html

https://www.youtube.com/shorts/K-BOurX5L28

https://nymag.com/intelligencer/article/melania-trump-book-promo-videos-rating.ht

Boeing Workers Strike for Greater Pay: How will this affect Boeing?

Over the last year Boeing has faced a number of issues with it's production and economic status. On January 6th, 2024, they were forced to ground all of their best selling commercial planes due to quality and safety concerns. This grounding was due to an Alaska Airlines flight, flown by a Boeing 787 Max, had a fuselage panel ripped off mid flight leading to an emergency landing. With other recent safety concerns over plane quality control the FAA (Federal Aviation Administration) have launched an investigation to ensure quality control of future planes. Following these issues there was whistleblowers and other allegations that have not been fully resolved involving the engineering ethics of  and quality control of Boeing airlines. 

Boeing 737-9 Max (Alaska Airlines)

    On September 13th, the union factory workers that operate one parts and two airplane assembly factories owned by Boeing are set to vote on a new union contract. In light of these events: "two fatal crashes that killed 346 people, a 20-month grounding of its best-selling jet," and the Alaska Airlines flight according to CNN the Union has a large amount of bargaining power thanks to the large decrease in stock price and overall price loss for the company. The union is asking for a 25% wage increase, improved healthcare, and better retirement benefits. If the deal is passed it will cost "$900 million" annually according to Boeing CEO Kelly Ortberg. For the union workers the deal is crucial as they previously accepted deals that reduced retirement benefits and healthcare costs, leading to general worker upset. 

    The workers are threatening a strike if an acceptable detail is not reached. According to IAM District 751 President Jon Holden, "We have achieved everything we could in bargaining, short of a strike," Regardless, he doesn't recommend a strike as they may not be able to further the deal. However, if a strike is enacted the company would be forced to either shutdown the plants or pivot and accept more of the demands from the Union. From Kelly Ortberg the strike could cost the company "$1.5 billion," a huge hit to their bottom line and profits. Additionally, the impact of a strike not only affects the union plants but suppliers and receivers of Boeing planes, causing a ripple effect damaging the profits of multiple companies.  It would upset supply chains to other factories, companies, and within the internals of the company itself.

Boeing Stock Price (1 year)

    With the onset of this looming deadline and the economic downsides to both agreeing and disagreeing with the deal Boeing has been placed into a difficult position. If they accept, they will keep the factories open and continue production but the raise in pay will cost more and reduce their falling profits even further. If they decline, the Union may strike leading to closure of production and massive losses for the company. In combination with their recent commercial and safety failures as a company Boeing faces serious threat to its long-term survival as the dominant US producer of airplanes. If the company falls further they may be forced to perform mass-closure or layoffs, some of which are domestic American workers.

Update: As of September 14th, the workes went on strike as the deal didn't fit there demands. They hope to achieve the deal they want, a 40% increase in wages over 4 years over Boeing's 25% offer. The outcome of the strike remains unknown but based on recent similar events, like the Auto Workers Union strike it may end in success especially with Boeing's constant losses over the last six years. This stems from post-covid economic damage including inflation and an increase in Union power. However, the outcome remains unknown and only time will tell if the unions will win again.If they do win Boeing will face even further losses and could indicate the final nail in the coffin for the Aviation super corporation.

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Sources:

CNN Boeing Strike Article

NBC Boeing Strike Article

NBC Boeing QC Issues

FAA Boeing 737-9 Max

ABC Boeing Strike Article

Workers Strike Information

Another Mass Shooting in Georgia: Inevitable with State’s policies

Written by Thomas Williams, posted by Mr. Silton

September 4th, Wednesday; Highschoolers walking to class, worrying about their next test, talking to friends, competing with each other over who has the better outfit. They laugh, and fight, and yell, but all of their sounds are drowned out by gunshots. 4 dead, 9 hospitalized. How could this happen?

In Appallace High School in Georgia, 14 year old Colt Gray fired his AR-15 rifle into 2 students and 2 teachers, killing them, hospitalizing 9, and injuring many more both physically and psychologically - many students following the event have had post-traumatic stress.

The Gun:

How could a 14 year old have access to a rifle “capable of shattering bone?”

Georgia law states that no minor shall be allowed to purchase a gun, but though there are regulations illegalizing the carry of handguns by a minor, there are no such regulations for rifles or shotguns. Even further, Georgian law has recently passed a law permitting the permitless carry of previously stated weapons. What does this lead to? A completely legal carry of the rifle into the school.

The Buildup:

Colt Grey was not secretive with his plans. According to the FBI, way back in May of 2023, Colt had sent online posts about plans to enact a school shooting. Upon investigation, investigators found that they didn’t have enough evidence to enact arrest, so they released him. We knew the danger posed by Colt, yet couldn’t/didn’t act on it. This is the issue with our current bureaucracy: When danger isn’t taken seriously, people die.

Following the shooting, a search of his home revealed a major interest in previous school shootings as well. This said, why would his father allow him to take the rifle? Police and investigators currently suspect that Colin had bought the gun for his son as a gift and as such was more lenient than he should have been - Just as the police had been

The Response:

Democrats:

Following the shooting, President Biden, Presidential Candidate Kamala Harris, and VP Candidate Tim Walz have all come forward.

Biden, upon acknowledging the tragedy, immediately called for a ban of assault weapons on a federal level as well as required universal background checks. This falls in line with a similar reaction of Biden’s after the Uvalde Elementary shooting in Texas, where again an AR-15 rifle was used to kill 19 children of ages 9 to 11, and 2 teachers. Following this, Biden also called for a ban of assault weapons, yet the warning was not heeded and the tragedy was repeated.

Harris remarks on how college students have widely had to practice school shooting drills. Stating “it does not have to be this way,” Harris goes off script asking that our schools should not be in a situation where shootings are so common that such drills are necessary. 

Walz, a coach and father, is outraged. On Twitter/X he stated that “This is pathetic. We can’t quit on our kids — they deserve better.”

Republicans:

Both Trump and JD Vance have also made responses to the tragedy soon after.

Trump in a Fox News Town Hall interview stated that the world is “sick and angry” and vows to “heal it” the best he can, bringing the incident to light in the otherwise politically focused news station

JD Vance however, in contrast to the others, claimed that shootings are just a “fact of life”, leading to public outrage as his view is essentially resigning himself to letting kids die even when he should be thinking of using his potential power to do something - in other words, if elected Vance doesn’t see it prevalent to try and stop school shootings, as it’s “inevitable” anyways.

The Public: And what can be done

It is important to understand that this is a new case, and as such likely to change greatly over time, however its existence is a reminder of our failure to adapt to the mental health landscape. 

According to Forbes, Georgian mental health care is the second worst in the nation, which when combined with easy access to firearms and a lacking permit system, has led to this tragedy. With current policies, this event will almost certainly continue and worsen, as it has noticeably done in the last 6 years. 

People are in danger, this issue is worsening, and states are only making it easier to get guns. What is happening? Well, partizan politics. The safety of citizens should come first, and making gun control a party splitting policy is a bad idea - people will now always feel like there are two equal sides, when one is clearly more important.

This is the issue with our country’s political divide: Issues get turned into slogans, until suddenly another school gets shot and more children die. Don’t vote for the party, vote for gun control.

Sources:

https://www.cbsnews.com/news/georgia-school-shooting-gun/

https://www.cbsnews.com/news/school-shooting-georgia-apalachee-high-school/

https://www.cbsnews.com/texas/news/uvalde-aj-martinez-survivor-robb-elementary/

https://www.bbc.com/news/articles/c049yw352r1o

https://abcnews.go.com/US/gun-laws-georgia-after-apalachee-high-school-shooting/story?id=113417198#:~:text=Georgia%20Gov.%20Brian%20Kemp%20has,without%20first%20obtaining%20a%20license.

https://www.gpb.org/news/2022/04/13/kemp-signs-bill-allowing-permitless-carry-of-concealed-handgun-in-public

https://www.cbsnews.com/news/georgia-school-shooting-suspect-colt-gray-what-we-know/

https://nypost.com/2024/09/05/us-news/alleged-apalachee-school-shooter-colt-grays-family-issues-chilling-threat-to-go-full-throttle/

https://t.co/xwGMRmc0Hr

https://t.co/ozYdvpDJ4u

https://t.co/diHTv2p2gb

https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/05/24/remarks-by-president-biden-marking-one-year-since-the-school-shooting-in-uvalde-texas/

https://www.foxnews.com/politics/trump-vows-heal-our-world-after-fatal-georgia-school-shooting-sick-angry

https://www.ledger-enquirer.com/news/state/georgia/article288359665.html

Written by Thomas Williams

JD Vance spreads conspiracy, threatening violence on Haitian Immigrants

    Following recent discussion in Springfield, Ohio, a conspiracy was created promoting the idea that recent immigrants, primarily Haitians, were abducting and eating local pets. As the conspiracy spread over this past weekend, multiple Republicans caught wind of the story and began to share it online, with one of the most vocal being JD Vance, Donald Trump's running mate. 

    In a statement on Monday, September 9, Vance said on the platform formerly known as Twitter, "Reports now show that people have had their pets abducted and eaten by people who shouldn't be in this country." The "reports" he was referencing were the theories and racist claims made by Springfield residents following recent influx of immigrants, primarily from Haiti. The following day he walked back part of the statement claiming they were only killing the pets, not eating them. But, the damage has been done as National Security Council Spokesman, John Kirby, stated "the false claims about immigrants were a “dangerous” variety of conspiracy theory." With conspiracies that spread extremely negative misinformation it can lead to violence and acts of hate, regardless of the insanity of the claims. One local Haitian had even reported an uptick in harassment and racist comments in the aftermath of JD Vance's comments.

    Furthermore, JD Vance in the same statement walking back the eating of pets, doubled down on the conspiracy encouraging followers to "Keep the cat memes flowing," the cat memes being cat photos with edited text with racist ideology and slogans such as, "don't eat me immigrants". Adding further fuel to the fire, he referenced a crash from last year involving a Haitian man driving a minivan hitting a school bus killing one 11 year old boy and injuring 20 more. The man was later charged with involuntary manslaughter and vehicular manslaughter being sentenced to 13 years in prison. His statement on the story was that "a child was murdered by a Haitian migrant,” a statement that mischaracterized the crime, instead depicting it as an act of violence from an immigrant, not an accident.

    However, the spread of misinformation gets even worse. On September 10th, the debate between presidential candidates, former president Donald Trump and Vice President Kamala Harris took place. During their debate the issue of immigration was posed to Donald Trump and he, on live TV in front of hundreds of thousands of Americans, with a straight face said that Haitian immigrants were eating and killing pets as if it was fact and used it as a reason to deport immigrants. The moderators quickly interjected with a statement that the story had been debunked as false, but he doubled down and ignored them. With both the backing of the former president and his running mate, JD Vance, the story can now cause even more damage than before.

    JD Vance's constant vocalization of anti-immigrant and hateful rhetoric is nothing new for Republican followers of Donald Trump. With the rise of misinformation and social media, Donald Trump and his supporters have utilized the technology to warp the perspective of the American public and "Red-pill" people bringing them further and further right. As we discussed in seminars regarding media the conservative right has a tendency to get news from select sources that heavily bias and skew towards conservative beliefs. Due to this fact JD Vance and others utilize it push their political agenda by spreading conspiracy, biased info, or general misinformation to promote beliefs in this case not dissimilar from Neo-Nazism.

    The dangers of these beliefs cannot be understated, with a history of racism and general bigotry, the promotion of racism ideology can spark renewed violence directed towards minorities. An example of this very principle was Donald Trump's social media and press statements regarding covid as the China Virus. Following those statements a rise in anti-Asian hate occurred increasing by 77% in America. With continued rhetoric towards Haitians, people of primarily African descent, a rise in anti-black hate could be on the horizon. Thus the danger of JD Vance's statements are clear, as altering people's perspectives and manipulating them into blaming immigrants for every problem can and has led to hate-crimes aimed at minorities. 

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Sources:

CNN Article

NBC JD Vance Article

JD Vance X

NPR Article

Department of Justice Hate Crime Stats

Trump's Debate Statement NBC

Russia is running out of Yuan :(

Warning: This article is economics-heavy and thus will be confusing for most readers.
Note: All figures, unless specified are denominated in USD. This basically means that when I say $1 million in Yuan, that's equivalent to the value of $1 million US dollars converted to Yuan. 
Note 2: I'm going to try to include footnotes -- whenever you see [1] or [3], go to the bottom of the page and find the corresponding number if you want some more information.

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On Friday, in a report authored by the Bank of Russia, the central bank urged other banks to basically minimize the amount of loans denominated (or using the currency of) in Yuan, the official currency of the People's Republic of China. The Russian Central Bank aims to only sell about $200 million yuan per day, compared to the (about) $7.3 billion that the bank was selling per day in the past month, a 97% decrease in the amount of yuan that the Central Bank is willing to sell per day. This is especially concerning considering that according to Bloomberg, the Yuan "accounted for 99.6% of the Russian foreign exchange market."

To illustrate the significance, imagine this scenario: You own a lemonade stand, and you make a lot of lemonade bucks. However, no real company organization wants your lemonade bucks -- meaning you can't (for example) buy another lemonade stand, buy the ingredients for lemonade, or buy paper cups. But you can buy these things in CARES Cash (CC). So to solve your problem of not being able to spend your currency, you go to one of your friends, who has some CARES Cash (CC), and basically every day, you give him 25 lemonade bucks for 5 CARES Cash (CC).
        And your friend is friends with a really big number of people, and converts a bunch of other people's lemonade bucks into CC too. Let's say in total, he gives out 1000 CC per day and gets 5000 lemonade bucks.[1]
        All of a sudden however, he tells everyone that he doesn't have a lot of CC, and that from now on, he can only give out 30 CC per day, a 97% decrease from how much he used to trade with everyone from before. Clearly, you (and everyone else) are super scared, as you need CARES Cash in order to buy lemons and sugar and paper cups, and without CC, you can't buy anything and keep your business going.[2]

Well, that's the situation that some russian companies find themselves in currently. In my analogy, you (the lemonade stand owner) would be a company, the lemonade bucks are the Russian Ruble, the CARES Cash is the Chinese Yuan, and the friend that you go to for CARES Cash is the Russian central bank.

So why did this all happen? Well, when Russia invaded Ukraine in 2022, the United States and almost all countries in Europe put sanctions on Russia and its allies who were involved in the war. Roughly speaking, sanctions are basically economic penalties applied to a nation. For example, American companies were not allowed to do business with Russia. Overall[3], this meant that the stored up foreign reserves of US dollars by the Russian Central Bank couldn't be spent and thus was (and still is) worthless. Ditto with the Euro. Furthermore, with the freezing (and seizing) of assets belonging to Russian oligarchs, Russia essentially lost a lot of its currency stored offshore.[4]

What this meant to Russia and Russian International Companies is that it was basically barred from using 3 of the 4 major foreign currencies (the Euro, the US dollar, the Japanese Yen[5]) to pay for things, leaving them with only 1 currency, the Chinese Yuan.
And since Russia and China are pretty close, Russia has been able to use the Yuan to stabilize its own currency and help its own companies pay for international goods and services.

However, with the recent new wave of June sanctions, Chinese businesses and corporations have been reluctant to help out the Russian government and businesses, for fear of being sanctioned by the United States and losing an important customer. Thus, there has not been steady Yuan cash flow between Chinese businesses and the Russian economy as a whole, leading to our current situation now -- where Russian banks have run out of Yuan to lend, and without money to lend, economic growth will slow within the Russian economy. Only time will tell what the implications of these cuts are, and how the Russian economy as a whole will react and be affected.

Xi Jinping and Vladimir Putin in Beijing for talks in May. Source: Getty Images

Notes:
1. By this metric, you would be getting 0.5% of the CC exchanged per day, or if this was in the real-world, around $36 million (in Yuan) of the total $7.3 billion that's being traded out every day. That's a lot of money.
2. The trading lemonade bucks for CARES Cash in formal economics terms is called a Foreign Exchange Swap.
3. Ok this is more nuanced but basically the US also put sanctions on countries that were helping Russia, such as China. So even though Russia could give all their USD to China, Chinese companies wouldn't really be able to spend it. Now of course you could technically "launder" it through other Chinese companies, but the main problem is that since most of the money is digital (e.g. when you buy a bunch of stocks, you don't usually get pieces of paper saying you have a stake in some company), the US can simply refuse the money and the money is once again basically useless. I guess maybe BRICS could get some use out of it....
4. From this lecture (at around 40:30), it is interesting to note that the Soviet government before its collapse moved a lot of assets offshore. Most likely this is (was?) still happening.
5. Recently the Yen has had stability issues but since Japan is allied with the US and Western countries, Japan also applied sanctions on Russia.

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Sources:
Bloomberg - Russian Liquidity Problems, Bloomberg - Russian Yuan Shortage, Reuters, Business Insider, Fortune

Gavin Newsom says Veto to California Bill that would have Offered Housing Loans to Undocumented Immigrants

On Friday Gavin Newsom Vetoed a Bill that would have given Undocumented Immigrants eligibility to house-loans 
Andrew Harnik/TNS, The San Franciso Chronicle

Undocumented immigrants have been a hotbed of controversy in the U.S. -- partly because more and more come in every single year, but also because it raises the question of what to do–should we give them the same benefits that we give to registered citizens, or do we try to push them out because they are undocumented? 

The issue with undocumented immigrants has been brought to the spotlight in California when Joaquin Arambula, a Californian Democrat, authored the Assembly Bill 1840 that would have given immigrants without legal status eligibility for house-loans up to $150,000 under the state program California Dream for All. For context, there were 1.8 million undocumented immigrants in 2022 residing in California, according to Pew Research Center. This figure has slightly declined in recent years, but California still ranks number one in terms of the undocumented immigrant population within the country.

However, this Friday, California Governor Gavin Newsom refused to sign the bill, claiming that “expanding program eligibility must be carefully considered within the broader context of the annual state budget to ensure we manage our resources effectively.” Newsom justifies his decision by pointing out how the state program, California Dream for All, has no money left after using over $500 million, which was reserved for the program, to provide financial assistance to over four thousand families. Newsom further comments, “The bill that was sent to me was a program that had no money.” By claiming a lack of funds, Newsom seems to imply that there are more important matters to focus on, in spite of the huge undocumented immigrant population. 

Although Newsom is a democrat, this decision to veto the bill appears to align with what Republicans want. Responding to the bill proposed by Arambula, Republican state Senator Brain Dahle agrees with Newsom’s overturn of the bill, saying “This was a bad idea. We don't have the resources available.” Other Republicans have criticized the bill, claiming that legal residents should be given priority for house-buying assistance, and that this bill would take away opportunities that citizens deserve. 

Arambula, the framer of the bill, was “deeply disappointed” when he heard about Newsom’s decision, arguing that it was more about the symbolism than anything else. He explains, ““The veto doesn’t change the fact that many people–including undocumented immigrants–dream of owning a home so that generational wealth can be passed to their children.” Arambula makes a fair point of the bill’s intended purpose, but what has already been done in the state for undocumented immigrants is important to consider. Over 700,000 immigrants without legal status gained free healthcare via access to Medicaid earlier this year from a decision that Newsom made two years ago to expand healthcare access to everyone, including undocumented immigrants. Holistically, California has already contributed much effort to helping undocumented immigrants, so was this bill too much to ask for? 

Well, as an added perspective, we can look at Newsom’s decision to veto in the context of the current political scene. This year’s presidential election is a fierce one, with both Democrats and Republicans pointing fingers at each other. Just this Thursday, a day before Newsom vetoed the bill, Trump called out Democrats at the Economic Club of New York, attacking them for being lax on matters of immigration and threatening to ban mortgages for illegal migrants in California. Given the timing of Trump’s statement and Newsom’s decision to veto the bill a day later, could it all be a coincidence, or was what Newsom did partially motivated by the election? 

As our country moves forward, the issue of undocumented immigrants becomes increasingly apparent. The real question, then, is what will happen to undocumented immigrants in the future. 

(For added context, banks are authorized to provide mortgages to undocumented immigrants, but this happens very rarely)

Sources Used:

https://www.pewresearch.org/short-reads/2024/07/22/what-we-know-about-unauthorized-immigrants-living-in-the-us/

https://abcnews.go.com/US/wireStory/california-governor-vetoes-bill-make-immigrants-legal-status-113472518

https://www.usnews.com/news/top-news/articles/2024-09-06/california-governor-vetoes-bill-to-help-undocumented-immigrants-buy-homes

https://www.nytimes.com/2024/09/06/us/immigrant-california-home-bill-veto.html

https://www.latimes.com/california/story/2024-09-06/newsom-vetoes-bill-that-would-have-offered-home-mortgage-aid-to-undocumented-immigrants

Trump's announces his Economic Plan: Lower Taxes, Higher Tariffs, and a new Government 'Efficiency Commission'

Credit...Former President Donald J. Trump speaking at the Economic Club of New York on Thursday
The New York Times

“My plan will rapidly defeat inflation, quickly bring down prices and reignite explosive economic growth,” is what Trump promised, this Thursday, at the New York Economic Club. Known for his bold claims and proposals, Trump is promising a whole lot in this upcoming election under the pressures of an inflated economy and increasing U.S. national debt. 

Trump claims that the first action he will take, if reelected, is to reduce taxes. He wants no tax on tips and Society Security benefits, expanded R and D tax credits, one-hundred percent bonus depreciation, and most importantly, a reduction on corporate taxes from 21% to 15%, but solely for companies that manufacture their products domestically. With this surprising condition of the tax cut, Trump seems to want to spur domestic production as a way to prop up the economy. Not only that, these proposals are similar to the tax cut he enacted in 2017 where he slashed corporate taxes to 21% from 35%, and as part of his economic campaign, Trump also wants to extend his 2017 tax cuts, which expire next year.

In comparison, Democrat and presidential competitor Kamala Harris’ economic plan is much different. She outlines a corporate tax increase to 28% from 21%, but aims to balance this by trying to incentivize new businesses–her goal being 25 million new business applicants–through a $50,000 tax deduction waiver for small businesses.

Trump’s reasoning for the tax cuts–to promote domestic production–looks to be wobbly in front of Harris’ plan; unlike Harris’ proposal, there is no equalizer for the tax cuts in Trump’s economic plan. The chances of domestic production filling the hole left by a deduction in taxes are slim, and begs the question: will Trump’s new proposed tax cuts really help the economy? Although his 2017 tax cuts did indeed fare well economically, it only did so for a short while before the repercussions caught up. After a year, the tax cuts actually widened the national debt. If Trump’s tax cuts failed the economy, how will lowering taxes again benefit the economy, if the result is a bigger deficit than before?

Interestingly, Trump’s answer to the question lies in increasing tariffs. Specifically, he plans to increase tariffs on national goods to anywhere between 10% to 20%. Moreover, he wants to place a 60% tariff on imports from China (this appears to fall in line with his emphasis on domestic manufacturing). His reasoning? To 1) generate revenue to pay for his proposed tax cuts–which he estimates to be trillions of dollars 2) protect working-class jobs and punish “unfair trading practices,” and lastly 3) help families afford childcare. 

Though the first reason is valid, but may prove to be insufficient, the last two are a bit questionable to say the least. Trump claims that these tariffs will protect working-class jobs, but existing tariffs on imported goods have already cost Americans more than $230 billion in a report by the US Customs and Border Protection. Furthermore, in a paper published by the Peterson Institute for International Economics, Trump’s call for increased tariffs would cost middle-income families an estimate of $2,600 a year. More tariffs means higher prices for the imported goods that Americans enjoy. While the 20% international tariff and 60% tariff on China would account for the tax money lost by tax cuts, the general American public is still paying for these tariffs, via the higher-priced imported goods. The third reason, childcare, which Trump justifies his tariffs by, saying that they “[will] be taking in trillions of dollars, and as much as childcare is talked about as being expensive, it’s–relatively speaking–not very expensive, compared to the kind of numbers we’ll be taking in.” This however, does not add much value to his economic plan–there’s already a burden from the tax cuts, and on top of that, middle-class families will be affected by these tariffs, so why is child care a priority of this tariff proposal? Clearly, Trump is blowing the potential impact of these tariffs out of proportion, and by linking it all together, his economic plan is deeply flawed, as it relies on the successes of his proposed tariffs–which may not even work out in the end. 

There is some hope to Trump’s economic plan, and that is the establishment of a new government sector: an efficiency commission. Trump adds on, explaining that the goal of the commission is to “conduc[t] a complete financial and performance audit of the entire federal government.” What’s surprising is that he fully consents to letting Elon Musk, CEO of Tesla, SpaceX, and X (formerly Twitter), be in charge of the commission. Inviting Musk into the efficiency commission looks like a desperate move on Trump’s part, and given that SpaceX–one of Musk’s companies–is a government contractor, there is much debate and controversy between this unexpected collaboration. 

Perhaps the best summary of Trump’s economic plan can be explained in terms of the four P’s (power, policy, process and politics) covered in class: Trump, who has political power as a former president and current candidate for the upcoming election, is proposing his economic plan, consisting of policies–like tax cuts and tariffs–that will eventually be part of a process to be enacted or rejected, to assuage concerns about the economy especially in a time of inflation and high national debt.

Sources Used:

https://www.reuters.com/world/us/trump-adopt-musks-proposal-government-efficiency-commission-wsj-reports-2024-09-05/

https://www.nytimes.com/2024/09/06/business/dealbook/trumponomics-trump-economy.html

https://www.nytimes.com/2024/09/05/us/politics/trump-elon-musk-efficiency-commission.html

https://www.pbs.org/newshour/show/comparing-trumps-and-harris-differing-ideas-on-how-to-boost-the-economy

https://www.cnn.com/2024/09/05/business/trump-economy-tariffs/index.html

https://www.cnn.com/2024/09/05/politics/trump-economic-plans-musk-government-commission/index.html

https://www.ft.com/content/f9f6b40c-7f00-49aa-883e-b82df6d76267

https://www.pbs.org/newshour/politics/watch-live-trump-delivers-remarks-at-economic-club-of-new-york-luncheon

https://apnews.com/article/trump-economy-harris-corporate-taxes-15ba5ecfdf5e907bd9b2c349b07222b8

https://thehill.com/homenews/campaign/4863990-trump-economic-agenda-elon-musk-commission-immigration-crackdown-tariffs/