US Struck With Severe Inflation
COVID-19 has catalyzed immense inflation. Because of stay at home orders and stimulus checks, Americans have more buying power than ever before. As a result, the population has gone on a spending spree. Combined with supply chain issues, which make goods more expensive, this spending spree has allowed companies to raise their prices. This upwards shift in prices means that the buying power of the dollar has decreased: in essence, one pre-pandemic dollar could buy more than one dollar today. While some level of inflation is normal, the supply chain issues and increased household spending power has elevated inflation beyond normal rates. It now sits at its highest level since 1980.
The US Government’s Federal Reserve uses one main tool to combat such intense inflation: interest rates. Normally, when increased inflation occurs the Federal Reserve raises interest rates. Higher interest rates slowdown business and consumer spending by making it more expensive to borrow money. This reduced spending in turn decreases demand which reduces the rate of inflation. Although action is needed to combat inflation, it is believed that the Federal Reserve won’t act until March. Only time will tell how the Federal Reserve will respond to this severe inflation.
Theranos CEO To Be Sentenced in September
In 2003, 19-year old Stanford graduate Elizabeth Holmes claimed that her company had discovered a revolutionary way to sample blood. The company, called Theranos, had patented a device that they stated could portably conduct blood tests and detect blood borne illnesses from fewer than one drop of blood. This unheard of technological breakthrough brought investors flocking to Theranos, and by 2013, the company had already been valued at $10 billion.
But Theranos’ patented technology wasn’t real. The company had lied about their capabilities and they had been found out. In April 2016, Theranos had come under criminal investigation for “misleading investors and government officials about its technology”(New York Times, 2016). By 2018, Elizabeth Holmes had been charged by the Security and Exchange Commission for “elaborate, years-long fraud”. Recent investigations have revealed more wrongdoings in Theranos final days, and on January 3rd, Holmes was found guilty of these misdeeds, including three counts of wire fraud and one count of conspiracy to commit wire fraud. But Holmes, who could face up to 20 years in prison for each charge, isn’t to be sentenced until September.
A Move Toward Worker Autonomy and Self Employment
The COVID-19 Pandemic has produced a cultural shift in America’s workforce: the event has seen an unprecedented exodus from traditional jobs. Many yearn to be their own bosses and since the pandemic’s start, the number of self-employed Americans has risen by 500,000 people. This growth, which is creating thousands of new entrepreneurs, retailers and small-business owners, has increased the total number of self-employed workers to 9.44 million or 5.9% of all workers according to the Labor Department.
You might be wondering: why are people leaving conventional jobs in droves? Although the answer remains uncertain, there may be a few variables at play. The most obvious of the reasons is that many people quit their jobs due to COVID-19 – they either sought a safer work environment or were forced to quit to take care of their loved ones and as such settled for at home work. Others may have left because they saw an opportunity to increase their salary through online retail, starting a business, or other ventures. Regardless, with recent advances in online marketplaces, working from home is easier than ever. So, the question remains: is this cultural shift temporary? Or will this pioneering increase in self-employment persist?
