Category: Economics

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BUY NOW, BUT PAY FOR IT LATER: HOW BNPLS ALLOW UNSECURED CONSUMER DEBT TO ACCUMULATE WITHOUT REGULATION

A Note by Alec Klimowicz

Download the full note here.

Buy Now, Pay Later (“BNPL”) has taken consumer shopping by storm. Businesses have emerged with the BNPL model as its primary operation, offering repayment plans, typically in four equal payments across six weeks, at no interest.[1] A financial movement that ostensibly began only a couple of years ago is now playing a role in over 200 billion dollars’ worth of transactions.[2] Consumers have accelerated BNPL’s use during the pandemic; BNPL’s usage increased by 230% in 2020 and 400% during the same year’s Black Friday holiday.[3] These businesses, however, have grown at such an exponential rate that regulators are now playing catch up.[4] The balancing act for regulators is to permit wide-usage of the service without taking away its redeeming qualities.

[1] Eversheds Sutherland, Focus on Fintech: The CFPB is Scrutinizing Buy Now Pay Later Products … Read the rest

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Why Everyone Should Condemn the BDS Movement

By: Jacob Mezei

The Boycott, Divestment and Sanctions (BDS) movement is a global movement started by 171 Palestinian organizations in 2005 with the goal of harming the Israeli economy by urging people, private corporations, and governments to boycott Israeli goods and services, divest funds, and establish economic sanctions on Israel. [1] Simply put, the BDS movement is bad. It is bad for the Palestinians. It is bad for the Israelis. It is bad for the world. The BDS movement harms third world countries in dire need of economic stimulus and hampers the growth of business and the development of technology. In addition, it incites hatred and discrimination, is harmful to future peace negotiations, and, as the Cour De Cassation (the highest court in France) recently ruled, it is illegal.[2]

The point of a peaceful boycott movement is to harm the entity being boycotted more than harming the ones doing … Read the rest

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Likely Effects of US immigration Reform on the National Deficit and Social Security System

There has been growing bipartisan efforts in Congress to reform the laws that govern U.S. immigration policy.[i] On June 27, 2013, the U.S. Senate passed “The Border Security, Economic Opportunity, and Immigration Modernization Act” (S. 744).[ii] If this proposed reform becomes law, it will likely help reduce the growing budget deficit and add to economic growth. It is important to not mistake immigration reform with pure amnesty, because a comprehensive or piecemeal reform will address the problem of millions of “illegal” and undocumented immigrants as well as: “specialized programs for agriculture and hi-tech industries, border security and visa‐tracking capabilities, temporary work programs, the future of undocumented adults and children already present in the U.S., systems for employer verification of work eligibility, and other dimensions.”[iii]

 

The U.S. Congressional Budget Office (“CBO”) found that immigration reform will help reduce the federal budget deficit by over … Read the rest

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Family Leave in the United States: Time for a Change?

On February 5, 1993, the Family and Medical Leave Act of 1993 (“FMLA”) was signed into law by Bill Clinton, mandating 12 weeks of unpaid family leave for companies with over 50 employees, if the employee has worked at least 1,250 hours during the last 12 months with the company.[1] In its findings, Congress specifically recognized the importance of parent participation in early childhood and the lack of job security available to working parents, and sought to give new parents more flexibility with work-life balance.[2] Since the FMLA was passed, the United States has fallen far behind other developed countries in providing leave for new parents. After more than 21 years, U.S. lawmakers should reexamine the national family leave policy and increase the benefits guaranteed for family leave. A more generous family leave policy is not only good for individuals and families, but also good for business.… Read the rest

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Hotel Conglomerates and AirBnB: The Tale of lobbyists thwarting a cheap stay in the Big Apple.

Some people refer to it as the City of Dreams. The Big Apple. The Melting Pot. The Capital of the World. Or the City that Never Sleeps. Regardless of the chosen alias or nickname, there is one universal truth about New York, New York.  That is—that it sure isn’t cheap! In fact, some would say that it’s outrageously expensive! So for all the accolades and attractions that have rightfully earned the city its share of global admirers, there exists a rather large barricade for those wishing to experience the city. A former candidate for mayor in New York City ran under the appropriately coined political party known as—“The rent is TOO damn high.”[i]  The average rent for an apartment in NYC? $3,017 a month.[ii] The average cost of purchasing a Manhattan apartment? $1.425 million.[iii] The average cost of a hotel stay in the city? A hair under … Read the rest

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Weeding out the Odds: Analysis of Oregon and Washington’s Constitutional Amendments to Legalize Recreational Use of Marijuana

 

 

Far away in the backdrop of the 2012 Presidential election, laid a secondary story that would make for primetime headlines on any other given day. That particular secondary story was none other than the states of Colorado and Washington successfully passing constitutional amendments that legalized recreational use of marijuana.  Unlike California and fifteen other states, citizens in Colorado and Washington will not be required to have a medical prescription from a physician to legally possess marijuana.[i] Instead, personal possession of up to an ounce of marijuana will be legal for anyone who is 21 years of age or older.[ii] Though the passing of the law reflects a growing national support for measures that either legalize the drug or aim to reduce the criminal punishments associated with it, federal law still dictates that marijuana is an illegal substance.  Consequently, who wins? Does the argument of … Read the rest

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Take Your Business Elsewhere: Why the Federal Corporate Income Tax is Destroying our Economy

The national debt of the United States now exceeds $16 trillion. Current estimates suggest that the present year’s deficit will amount to approximately $1.1 trillion, a negligible improvement upon 2011’s $1.3 trillion deficit. The present unemployment rate is one of the highest of the past sixty years, with approximately eight percent of Americans unable to find work. Unless significant changes are made in both federal income and expenditure, the economic livelihood of future generations is bleak.

Searching high and low for a remedy to our nation’s economic woes, many politicians and businessmen have set their sights on the federal corporate income tax. Hoping to simultaneously create jobs and stimulate our economy, individuals from across party lines, including Barack Obama and Mitt Romney, have suggested that we lessen the federal taxation of corporate profits. A small group, though, including individuals such as Gary Johnson and Ron Paul, are of the
… Read the rest
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Student Loans: Trading Your Life for a Degree

            Many of today’s high school students are led to believe that, should they wish to be competitive in the job market, a bachelor’s degree, and often a post-graduate degree to boot, is necessary. Flocking to universities across the nation, America’s youth are betting against their uncertain futures and burying themselves under mountains of debt. Too often, these students find themselves overwhelmed after they have graduated and the bill collectors come knocking.

            In 2010, students borrowed approximately $100 billion to fund their educations. In 2010, graduates who had relied upon student loans to fund their educations emerged from their respective universities with an average of $24,000 in student loan debt. By September of 2010, according to the Department of Education, over 320,000 of the 3.6 million individuals with student loans who had entered their repayment period from October 1, 2008, to September 30, … Read the rest

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What’s Mine is Yours: Takings After Kelo

“The sacred rights of property are to be guarded at every point. I call them sacred, because, if they are unprotected, all other rights become worthless or visionary.” Supreme Court Justice Joseph Story, 1852.


Security in ones’ property has been a fundamental tenant of our society since its inception.  The Fifth Amendment enumerates this vital right and has served as a refuge against the government unjustly interfering with individual property rights for centuries. But, as judicial interpretation develops over time, a startling trend has emerged that could profoundly shape the future of the taking of private lands by the government. The landmark case of Kelo v. City of New London marked a radical shift in what could be construed as a legitimate taking based on a state’s police power. (1) This ruling has resulted in many states drafting new legislation in an attempt to temper the controversial ruling. (2) … Read the rest

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Quantitative Easing May Create Foreign Unease

While I cringe to find myself on the same side of the fence as Sarah Palin, she and Republican politicians in Washington D.C. may be right to fear Ben Bernanke and the Federal Reserve’s new effort of quantitative easing. The Federal Reserve’s proposed plan is to buy $600 billion in Treasury bonds by June 2011. Their aim is to lower long-term interest rates and to keep the dollar cheap, thereby stimulating the U.S. economy by encouraging the sale of goods overseas. While Palin may not understand why she objects the plan, I do: it has the potential to antagonize U.S. trade partners and stiffen foreign trade.

Dissenting Conservatives are concerned with the long-term effects of the move, which could cause a domino effect of runaway inflation and frustrate U.S. trade partners. Bill Gross, the manager of the largest mutual fund in the world, Pacific Investment Management Company, LLC (PIMCO), … Read the rest