Second Chapter 2 Post

     For today's post regarding Chapter 2, I want to discuss the significance of the U.S. Constitution and how it has evolved over the course of 200+ years to the document it is today. The U.S. Constitution was originally formed to create a strong national government that had separation of powers in order to replace the ineffective and weak Articles of Confederation. The Constitution had seven major articles that together helped greatly improve what the Articles tried to originally accomplish. For example, the first three articles established the three branches of government that are still fully functioning today, while the other four articles were created in an attempt to avoid any problems that may arise over the years. For example, Article IV talks about the full faith and credit clause, which mandates that states honor the laws and judicial proceedings of the other states. The Constitution from the beginning was such an improvement over the Articles of Confederation, even with the amount of opposition it received from the onset.

     Over the course of U.S. History, the Constitution has been amended multiple times in order to deal with various problems that came up that needed to be dealt with. For example, in order to get the Anti-Federalists to approve the Constitution wholeheartedly, the Bill of Rights was created that protected a variety of personal liberties such as freedom of speech and religion. This major addition to the Constitution is still in place today as one of the most notable features of the overall document. As of today, there have been twenty-seven amendments that have been added to the Constitution. These amendments have helped shaped and change our government as the nation evolved and grew.

     The main point I wanted to talk about regarding the Constitution is how the document evolved due to changes in culture and society. For example, the textbook talks about how in the past, people were uncomfortable towards the Three-Fifths Compromise but they would never have thought that an African American would ever become President of the United States. In addition, not many of the Framers considered women to play diverse roles in American society, but here we are today with women proudly representing all aspects of the workforce. These changing views showcase how as our society changes over time, the Constitution evolves to accomodate these changes. Basically, the Constitution will never stay completely the same. While the fundamental principles will always be there, the Constitution will continue to evolve in order to accurately represent our growing society.

The Meaning & Significance of Ben Bernanke's Speech

     On August 31st, the chairman of the Federal Reserve, Ben Bernanke, delivered a highly anticipated speech at the Kansas City Fed's annual symposium in Jackson Hole, Wyoming. The purpose of this speech was to give economists and central bankers from around the world who came to attend the conference the current state of the economy from the view of the Federal Reserve as well as any future plans, if any, that the Fed will take in order to help stimulate the economy. 

     The speech Bernanke gives at this event has become an annual event in recent years while he has been the chairman of the Federal Reserve. Bernanke's speech has become extremely significant in the last two years as the stock market greatly reacts to what he says during these speeches. For example, based on researched gathered by USA Today, in 2010, leading up to Bernake's speech on August 26th, the S&P 500 stock market index was down 6.1% for the year, but after his speech, the index rose 20.1% for the rest of the year. A less "drastic" but significant change took place last year in 2011. Up until his speech on August 25th, the S&P 500 was down 7.8% for the year, but after the speech, the index rose 8.5% overall for the rest of the year. These statistics highlight how important Bernanke's speech is to the investors not only within the United States, but also around the world who look to the U.S. to lead the way during these difficult times. 

     Now, onto the meaning behind the words in Bernanke's speech. The key statement Bernanke gave during his speech was that "the stagnation of the labor market in particular a grave concern." This statement resonated throughout the speech as he proceeded to let the world know that the Federal Reserve is prepared to step in and do whatever it takes to stimulate the economy. However, he did not say exactly what the Fed is going to do or when they are going to step in. I think Bernanke and the Federal Reserve is going to wait it out a bit longer and see if things start to drastically improve over the next few months.

     As of right now, stocks have responded well to Bernanke's speech. However, the latest economic data have still been pretty mixed as the job growth has been pretty slow and consumer confidence shifting month to month. This coming week will be a major week for stocks as the Federal Reserve Board meets to decide whether or not to take action based on the various economic reports that have been released since Bernanke's speech. Based on everything that has happened so far, I strongly believe that whatever the Federal Reserve decides to do, it will have a huge impact on the stock market. I hope that the Fed does decide to step in to try and stimulate the economy because the recovery effort so far has been painfully slow and somewhat inconsistent. If the Federal Reserve does indeed step in, I think that could be a major step towards getting the economy back on track. Let's hope for the best!

Articles Referenced:

http://www.usatoday.com/money/economy/story/2012-08-30/ben-bernanke-speech-jackson-hole/57470268/1

http://money.cnn.com/2012/09/09/investing/stocks-lookahead/index.html?iid=Lead

Chapter 2 Post

     Chapter 2 talks about the events leading up to the development of the U.S. Constitution, such as the formation of the Articles of Confederation and the resulting conflicts, as well as went in depth in describing these important documents and getting them ratified by the states in order solidify the foundations of the government we know today. 

     One of the more interesting topics discussed in the chapter involved the underlying principles of the U.S. Constitution, and how these principles affect the government today. The Framers decided to utilize a federal system that allows power to be shared between the state and national governments. This system was chosen in favor of the unitary system modeled by Great Britain. There were many people against having a strong national government (known as Anti-Federalists), but the Framers introduced the concept of "separation of powers" that makes use of the "checks and balances" in order to try and ease the concerns of the Anti-Federalists.

     Separation of powers is the way our government spreads out the powers and duties among the three branches of government. Without this, whoever would be leading the country would have the possibility of turning into a tyrant with nothing it their way to stop them. According to our textbook, there are three major features of this method:

1. Separate the U.S. Government into three unique branches; the executive, the judicial, and the legislative.
2. Three separately staffed branches of government to execute these functions.
3. Constitutional equality and independence of each branch.     

     There are numerous powers each branch possess that are unique to only that branch. For example, the executive branch can propose legislation to Congress or create foreign treaties, while the legislative branch can pass all federal laws proposed. Meanwhile, the judicial branch can interpret the federal laws and determine if they are constitutional or not. In addition to these distinct powers, each branch has a number of checks that they can utilize in order to limit the other branches' powers. For example, the legislative branch can pass a controversial bill into law, but the executive branch can overturning the ruling by vetoing the bill. Or, the judicial branch can rule that the bill or law in question is overall unconstitutional in nature. The Framers of our government wanted to have a pure system of separation of powers, but instead, what evolved was a symbiotic relationship between the three branches that has allowed our government to be pretty successful for over 200 years.

     The system of checks and balances can be seen pretty much everyday in the political world. Over the course of U.S. history, there have been 44 presidents that have to deal with this system in order to be able to enforce the policies they want to support. For example, the textbook uses the example of George W. Bush. As the commander in chief, Bush had the power to deploy troops to Iraq for war in 2003. However, in order to keep troops overseas for more than 90 days, he needed to get the authorization from Congress. Numerous examples of the checks and balances system can be observed just in the past two to three years under Barack Obama's administration. In order to get the Patient Protection and Affordable Care Act (aka "Obamacare") passed, he needed to get the approval from Congress in order to make the bill become a law. The same can be said about the American Recovery and Reinvestment Act of 2009, which was the major stimulus package Obama wanted to get passed in order to try and help the economy recover from the recession. As you can see, everything needs to be approved and revised by all branches in order to pass the best "product" into law.

     Things can get very difficult for the President at times dealing with this system, especially when the House of Representatives and the Senate are not in the majority towards the political party of the President. However, I believe that this overall system is a solid system that has proven to be successful over the years even with the times of disagreement between the executive and legislative branches. Through the separation of powers in our government, we can ensure that no single person possesses too much power. The balance that exists within our government is what I think makes it one of the top governmental forms in the world.

The Current State of Facebook's Stock Debacle

     Hey everyone! In addition to my blog posts regarding the chapter readings, I will also be posting various posts that deal with business topics and their connection to the government. These topics will range from stocks, to mergers, and everything in between. By focusing on a business theme, I will be able to discuss current events involving major companies throughout the country and the world as well as the ramifications, politically and legally, that evolve from those companies' actions. Hopefully all of you will find some interest in the topics that I talk about. That being said, let's begin!

     For this post, I wanted to talk about Facebook and the whole situation that has developed over the last few months over their new stock. To begin, Facebook started this process by filing for an initial public offering (IPO) in early February of this year. An IPO is what is needed to happen in order to transition from a privately held company into a publicly held company. To achieve this, Facebook had to submit a S-1 form to the Securities and Exchange Commission (SEC), which is basically the "watchdog" that oversees the stock market. Once this was completed, the next couple of months consisted of promoting the stock and obtaining a solid target price to sell the stock on opening day. During this time, the hype surrounding Facebook grew as it drew comparisons to Google, among other various technology stocks. 

     Once May 18th, 2012 came around, everything was set for a great opening for Facebook. Their initial offering price was set for $38. The company had 421 million shares on hand to sell to the public. The future seemed bright for Facebook until everything started to go wrong. Due to various technical problems and glitches, the opening day was filled with confusion as orders to buy the stock were prevented, leaving many investors wondering whether or not they actually were successful in getting the stock. At the end of opening day, the stock ended up only gaining 23 cents, which was very disappointing to many business analysts. As the following days and month passed, Facebook's stock steadily declined, and as of August 31st, the stock stood at 18.06 points, down over 52% from its original price.

     Now that I have talked about the "general" background regarding Facebook's stock, I want to touch on the legal aftermath resulting from the botched opening as well as the overall situation. As of today, over 40 lawsuits have been filed against Facebook and the NASDAQ (the stock exchange where Facebook's stocks are being sold on) due to the opening day debacle. Facebook in turn has asked to consolidate these lawsuits into one major suit since the complaints overlap. In addition, there have been reports and accusations that there have been some information only passed around to preferred clients that gave them an advantage against the everyday investor. This type of action, if proven to be true, is a huge no-no as an even playing field needs to be provided to everyone publicly. On top of all of this, the Securities and Exchange Commission has begun an investigation into whether or not Facebook took part in a "pump and dump" scheme. The pump and dump scheme is basically where the company tries to inflate the price of their stock through untrue positive statements in an effort to sell the stock at a higher price than it is supposed to be (Ex - Enron). All of these allegations and legal battles with the government over the next through months and maybe years will takes its toll on Facebook in my opinion. After everything that has gone wrong, I honestly can't see them bouncing back, especially with the overall popularity on the decline and rival social networking sites such as Twitter on the rise.

     Overall, Facebook is in a pretty bad situation as of right now, and it'll be months before any sense of stability, if any, comes for the company. As a closing note, I want to link to this interesting article that I read while researching all of the specifics behind Facebook's IPO. Basically, from my interpretation, if people researched a bit more in depth and read the prospectus, instead of immediately getting sucked into the hype, they could have realized that the stock wouldn't have done so well from the beginning  anyway. It just goes to show that it is always better to make an informed decision rather than a decision based on impulse! Until next week... thanks for reading!

     

Articles Used to Research:

http://www.businessinsider.com/facebook-stock-letter-shareholders

http://buzz.money.cnn.com/2012/08/31/facebook-stock-2/?iid=HP_River

http://www.washingtonpost.com/business/technology/facebook-moves-to-consolidate-cases/2012/06/15/gJQAry7SfV_story.html

Chapter 1 Post

     Hey everyone! This is my first blog post of the new school year! I'm honestly pretty interested in doing these blogs for class even if it may seem like quite a bit of work to complete. I hope that over the course of the school year, my writing in these posts will steadily develop into something actually worth reading.

     Anyway, for my first post, I want to discuss a certain topic from Chapter 1 in the textbook. As a whole, Chapter 1 describes the beginnings of the American government as well as the basic characteristics that form the foundation of what makes up our government today. The section I wanted to talk about today is the section that states and explains the functions of American government. In the textbook, there are five specific functions that the government should be able to enforce:

1. Establishing Justice
2. Insuring Domestic Tranquility
3. Providing for the Common Defense
4. Promoting the General Welfare
5. Securing the Blessings of Liberty

     Out of these five functions, I want to go a bit deeper into the "Insuring Domestic Tranquility" function. The textbook talks about how our government has taken "extraordinary" measures during times of crisis, such as during and after the terrorist attacks on 9/11, in order to contain the threat of terrorism within the United States as well as abroad. During this time, the Department of Homeland Security was formed and legislation that allowed the government to have nearly unlimited power when it comes to weeding out potential threats was passed in order to make sure the United States had peace within its borders. When I read this section in the book, I immediately thought of the controversial Patriot Act that was signed into law on October 26, 2001. I decided that I wanted to research this act more and figure out what exactly made this a controversial bill.

     From my research, I discovered quite a few aspects of the act that put together, made this a very controversial situation. First, people who were against the act voiced their anger at how fast the act was passed after the September 11 attacks. Opponents believe that the Patriot Act was passed opportunistically after the attacks in order to get by without much debate. In my opinion, I think the opponents were kinda wrong. I feel that in order to ease the panic throughout the country (the US was also dealing with Anthrax attacks a couple of weeks after the 9/11 attacks), Congress had to work together to make a quick and effective response to ensure the American people that the country can bounce back and get stronger. 

     One other major controversy the Patriot Act created involved the invasion of peoples' privacies. Since the Patriot Act allows the government to research potential threats in depth without too many rules in their way, citizens have become concerned that "Big Brother" may be using their powers to intrude into their private lives. For example, the use of wiretaps without the consent of the citizens is technically an invasion of privacy in my opinion. In addition, the use of "Sneak-and-Peek" warrants, which authorize officers to enter private properties without the owner's permission or knowledge, is honestly a pretty bad provision of the Patriot Act, and definitely an invasion of privacy. However, I think these provisions can definitely be used for good if the officers who use them actually have legitimate evidence to further investigate a potential threat. Overall, I feel that it is really a moral decision law enforcement officers have to make whether or not to use the provisions of the Patriot Act in the correct, honest way.

     Overall, this section from Chapter 1 definitely got me thinking deeply about our government and the actions that they take in order to try and make our country the best it can be. Hopefully the following chapters in the textbook can provide equal and even deeper ideas to think and research about!