Does Internet Increase, Decrease, or Supplement Social Capital?

The American Behavioral Scientist association did a research study to see how the internet affects social capital. They published their results and analyzed them in the article: Does the Internet Increase, Decrease, or Supplement Social Capital? I was extremely intrigue and curious to read this article because I have always been interested in knowing how the internet has changed the way society interacts.

Many years ago, the world was completely different and much slower than today. The article suggests that community ties were much more appreciated. There was no email, just plain old fashion post-cards to remain in touch with those far away. Then, communication slowly took a turn when the internet was introduced. People had the opportunity to send email’s to stay connect to those far away and you could find people that you haven’t talked to in years. Now, social networks, such as facebook, myspace, and hi5, have allowed people to show pictures, videos, and share stories with your friends all around the world. Not only has communication among people changed due to the internet, but the way businesses operate since they are more cost effective. The world is completely different and society is adjusting to these changes. Some people are agaisnt the internet, others things is a very useful tool that enhances social capital.

The authors of the article, Barry Wellman, Anabel Quan Haase, James Witte, and Keith Hampton, concluded that  “greater use of the Internet may lead to larger social networks with more weak ties and distasteful interaction with some of these ties, resulting in lower commitment to the online community.” I do agree that the internat may lead to larger social networks, since it is easy to become a member and you can stay close connected to your friends and family that are live far away. Also, I do feel that ties will be weaker, no distasful however. People are always going to stay connected to their social circle and family and I find difficult to see a decrease in online community commitment.

Therefore, I do feel that the internet has a positive effect on social capital because people have the opportunity to build new bonds.

Health Care a Right or a Privilege?

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Health care reform had to face many obstacles before it got passed. In this post, I will argue why I believe health care is extremely important for the American society and why government should have the responsability to take care of its citizens.

It is crucial to bear in  mind that without free health care less favored groups will not  have access. It is extremely difficult for someone with a low income to pay the high costs of medicines and hospital care. In America everything related to health is very expensive; I can recall from personal experience. A few years ago I was severely injured in a car accident, my bill surpassed the half million dollar mark. If I hadn’t been insured I’d still be paying now for the costs. As Jordi post mentions, 45,000 American people die each year because they are not insured. The government has the power to decrease that number and save thousands of lives. The health care system needed to have these changes to benefit society as a whole, instead of only the people who could afford it.
I believe health is a right, not a privileged. As a matter of fact the United Nations Bill of Rights in its third article says: “Everyone has the right to life, liberty and security of person.” How can we guarantee life if medical attention is only a privileged for those who can pay for it?
On the other hand, in a way the fact that health care is proportional to your income makes sense since those who have more should pay more and at the same time get the type of attention they prefer. However, since health is a right it should be the government’s responsibility; it should be free for all. People pay taxes, therefore, they deserve services, including health.

It will be a hard transition for the American people to change their current medical systems. Nevertheless, I think it is going towards the right direction. Free health care is a right we should all fight for.

How the US-made crisis affected the Global Economy

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In my last post I talked about greed and its involvement in the financial crisis. I want to switch gears and talk about globalization and the emerging challenges that the world’s economy faces in my final paper. In the United States, we have yet to see evidence of a sustained recovery in the housing market. Mortgages delinquencies for both sub prime and prime loans continue to rise along with foreclosures. The commercial real estate sector remains troubled. Two particular uncertainties include the phasing out of government programs that has propped up demand, and the houses working through the foreclosure process potentially resulting in an increase in supply of houses. Much uncertainty still remains as to whether mortgage rates will stabilize and not jump as a result of the phase-out, causing decreased demand for housing. The fate of the homes in the foreclosure process is another uncertainty. If there is a surge in foreclosures, there will be a significant increase in supply of houses on the market, which could damage prices and hinder recovery. Given such uncertainties in the economy the United States faces significant challenges.

As an advanced economy with slower growth, the United States will face difficulties of timing in phasing out stimulus programs. Nevertheless, this US-made recession has affected the entire world’s economy. In my final paper, I will analyze how this recession has affected the world and what programs have been developed to help overcome this recession. Financial institutions need to understand that their actions not only affect the United States economy, but the world’s economy as well. The era of new global financial challenges that the world has arrived at has indeed highlighted not only the interdependencies we see occurring in a globalized world, but also the deficiencies that plague the current world financial systems and institutions. Must global organizations set the standards and redefine the role of financial institutions?  How can global organizations meet the needs of the many challenges that became apparent after the 2008-2009 financial crisis? Should countries collaborate with each other to make these reforms? These are questions that I hope to answer in order to come to a discovery of a solution at large.

Recession caused by greed of Americans?

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The documentary Inside the Meltdown illustrated the details of the recent recession in America do to sub-prime mortgages. After the fall of several big companies such as Bern Sterns and Lehman Brothers, government saw no solution but to intervene, they needed to act to help the economy survive. Wall Street had gambled by entering into the house market, many firms had made massive investments in sub-prime mortgages not knowing that it would become toxic for them in the future. Companies that decided to invest in this market had been enjoying immense profits for several years. They would buy mortgages; put them into securities and sell them to investors. However, the bubble that had been giving them great success started collapsing and companies began losing billions of dollars in bad mortgages. The meltdown began on 2007 rumors spreading that the house market was going to collapse. By spring of 2008 when CNBC rumored that Bern Sterns was in financial problems, things began going downhill. Something that government had to take into consideration was the huge web that connected every single company to the world in unforeseen ways. When the president of the Fed, Ben Bernanke, saw Sterns in the midst of going bankrupt, his fear of entering a recession became true. In the next few days CNBC announced that JP Morgan was buying Bern Sterns for $2 per share. More companies that have been involved in this risky market one being Lehman Brothers. Although government had helped Bern Sterns, they did not offer the same support due to moral hazard and political pressure; Lehman Brothers announced their bankruptcy shortly after. Everything froze the next day, nobody was making loans to anybody and the market was collapsing. Government had to act quickly so Paulson and Bernanke proposed a bill that Congress would eventually pass — a $700 billion bailout plan. This documentary gave everyone an example of how greed and social economic status can bring down an entire economy. People where buying houses that they couldn’t affored. This can be a lesson to not only business people but to Americans to understand the implications of buying something that they can’t afford.

Multiple ways to attain a high share price

After seeing the negative consequences that occurred in the Enron scandal, many businesses have made an effort to change the way they operate in order to avoid similar results. Enron’s greatest downfall was that they focused only on attaining a high share price while failing to attend other important aspects of the business. There are other social, economic and environmental activities that could be measured in order to make positive impact on the business. Enron knew that their finances were being observed, measured and recorded by shareholders and Wall Street; therefore, they made all the possible changes or modifications in their financial statements to meet the high expectations of the market. As for the other activities mentioned, they could afford to slack off since they weren’t being measured. Seeing the negative effects by paying attention to this, there has been an effort by agencies to begin measuring these types of activities because they could become opportunities to create a sustainable business.  The Boston-based non-profit CERES formed The Global Reporting Initiative (GRI) in order to allow companies report their periodic social responsibility and environmental reports. The GRI was modeled after GAAP (Generally Accepted Accounting Principles) which is the standard framework of guidelines for financial accounting used in American companies. The GRI, on the other hand, has guidelines to measure environmental, social and economic reporting and give them the same importance as financial reports since these are aspects that could also influence investors. Eventually the GRI and GAAP could be combined to inform the company’s financial and non-financial outlook and make them both equally important for the success of the organization. In a wired world where people are better informed of the organizations activities, creating measurements for non-financial activities can also improve the share price of the company.

Dot and her insights on research

I had the opportunity to meet with the librarian Dot Thompson. I have never thought of asking for help when it comes to research and write my papers by utilizing the sources my teachers have provided. It was extremely useful for me to go and talk to her since she introduce me to the world of data bases. She pointed out the ABI Inform, Web of Knowledge, and Academic onefile, all under the management tab. To start the research she said that it would be better to search by subject to have a broader sense of the subject. Also, the data base later gives you more specific subjects that you can research. The ABI Inform had more that 1,300 articles and all of them where linked to the library. On the other hand, the Web of knowledge can show you how many times a work has been cited. This could be useful since it shows the importance of the article. Later we researched Academic onefile, she find this one to be very helpful because it gives you different components of the subject that you did not think of before: graphs, data, etc. The data base brought me to find an article that has been very useful to write my paper.

It was great to meet Dot Thompson, not only because she provided me with the data bases but she also gives you further insight on how to find exactly what you are looking for. I can take this learning experience as an advantage for my future reaserch papers.

Power and corruption attributes to the fall of Enron

Power seems to be present in all types of organization, whether informal or formal. Depending on their internal structure, organizations tend to adapt diverse sources of powers and Enron is no exception. In my paper, I want to focus and finding the link between Organizations and Organizing and The Smartest Guys in the Room in the concept of power.

I believe power is evident in The Smartest Guys in the Room; several people had control over the company and they had a major influence not only to their employees but on Wall Street as well in very deceiving ways. I would like to analyze the different types of power within organizations and find which one applies to Enron. Organizations and Organizing discusses Emerson’s view of power as “the control or influence the other resides in control over the things he values, which may range all the way from oil resources to ego-support, depending upon the relation in question. In short, power resides implicitly in the other’s dependence,” (p.203). By doing some research (used index!) I found two very interesting books: Emerson and power: creative antagonism in the nineteenth century and Union power and the public interest which could give me more insights of power and its influence in organizations. Along those lines, I feel that the concept of corruption should be included when analyzing Enron’s power since it pertained to the company. I would like to explore how power and corruption are connected into the fall of Enron.

Organizations and Organizing gives me a wide array of sources for this topic. Among them, I found interesting the book The Modern Corporation and Private Property by Berle and Gardiner in which they argue “that as corporations grew large, ownership grew increasingly dispersed among disconnected (and therefore powerless) shareholders, while managerial control grew increasingly consolidated,” (p.354). I think this is very relevant to what happened in Enron, especially after Skilling took control of the majority company. I would be interesting to read some of Berle and Gardiner’s work and find the connection in The Smartest Guys in the Room. This could be a very interesting subject for the paper because it brings out a major flaw that Enron had.