T HE P ENNSYLVANIA S TATE U NIVERSITY E CONOMICS A SSOCIATION P RESENTS :

T HE O PTIMAL B UNDLE
S PRING 2014:
WEEK OF J ANUARY

23 RD

E DITOR : C OLE LENNON P RINT EDUCATION COORDINATOR C ONTRIBUTORS : W ILL D AWSON , L EAH G ALAMBA , C OLE L ENNON

Upcoming Events: General Body Meeting: 1/23

Money Supply Report: 1/23

Psuea.org EA Homepage Psuea.org/blog Education Blog

FEAR OF AN UNEQUAL PLANET

Income inequality has come home to roost. 85 people at the top of the worlds pyramid have as much wealth as the 3.5 billion people at the bottom.The British non-profit group Oxfam issued a report citing that fact just before the World Economic Forum kicked off Monday in Davos, Switzerland. Inequality of this volume is not just a moral problem, officials at Oxfam and the U.N. argue, it has the potential to exacerbate existing economic and social issues.Worse still, the gap between the worlds rich and poor is widening, fast. Many argue that the rich wield economic and political influence to this end.Though malicious intent is far from proven in a court of law, world leaders should act to reduce the degree of income inequality at home and abroad.WD
Check out the articles: bit.ly/1jgYOUc ; slate.me/1fX96s0

Evidence suggests that fear is justified.

JIM BEAM AND HIS NEW HOLDING COMPANY

The Jim Beam distillery in Clermont, Kentucky represents the firm's American-made image, but a recent story ruins that feeling for Beam's customers. Beam's parent company was sold to Suntory, a Japanese distiller, setting off concerns about the validity of the companys American-based branding. Before this deal, two other Beam ventures were not American either. Canadian liqueur brand After Shock and Scotlands Laphroaig Scotch were both owned by Beam before Suntorys purchase of Jim Beam for $16 billion. Foreign buyouts of American alcohol manufacturers are also becoming increasingly popular, as other American brands like Narragansett are now headquartered in other countries.CL

The deal is part of another American business tradition: consolidation.

Check out the Article: nyr.kr/1aqu5Pe

O N T ARGET : H ACKING AND C REDIT C ARDS

Roughly 110 million Target customers had payment information hacked over the holidays, and a reason why concerns the magnetic stripes on credit cards. Financial information is hacked easily with just magnetic stripes that track customers purchases, but the United States hasn't quickly followed other countries in creating more secure payment systems. A new "chip-and-PIN" credit card system likely improves financial security, as it requires both a PIN number and a microchip embedded on the card to be used. Banks might begin implementing it more widely, but Targets recent incident should increase their urgency in doing so.CL
Check out the article: bit.ly/1dByMqV

This person might be part of an unfortunate 110 million.

T HE E CONOMY , D OWN U NDER

A recent JPMorgan report suggests that Australias economy will grow more slowly than usual. Australia's resource-heavy economy will likely suffer as the countrys mining investment boom subsides, despite record low interest rates and 23 years of sustained economic growth. Iron ore and coal are Australias main exports, and trade based on these two exports is declining. Home construction and other exports will help buoy Australia's numbers for the time being, but not enough to subdue the effects of an export slowdown. Australias GDP growth this year is forecasted to be 2.75%, a slight disappointment from the hoped-for 3.25% for the year.CL CHECK
OUT THE ARTICLE: ON.WSJ.COM/19YQJON

Some countries would love to have 2.75% growth, however.

O PENING T HE G ATES OF D EVELOPMENT

In a recently published letter, Microsoft founder and philanthropist Bill Gates attempted to debunk the common myths surrounding developing countries.Those myths include: poor countries are doomed to stay poor, foreign aid is a waste, and saving lives leads to overpopulation. His letter focused strongly on the fact that countries that were previously in a state of national poverty, such as Turkey and Chile, now have per-person incomes equal to that of the United States in the 1960s. Gates was adamant in his belief that conditions will continue to improve and even stated that by the year 2035, poor nations will no longer exist.LG
In 21 years, no nation is expected to be a poor one.

Check out the Article: n.pr/1mtAtYk