Rick Kelo – Bubbles

As a tax expert with a degree in economics, Rick Kelo knows (and has written more than one article) about economic bubbles. A bubble, to put it one way, occurs when any asset is traded for a price that far exceeds that item’s intrinsic value. A bubble is far from a new phenomenon; as a matter of fact, the first bubbles occurred in the 17^th century, well before real-time information on any asset was available.

Bubbles, of course, lead to economic crashes, which lead either to recessions (bad enough), or outright depressions (far worse). The British South Sea Bubble, which occurred in the years 1711 to 1720, gave us the term we use so often today. Previous bubbles (including the Dutch tulip bubble, which caused widespread economic devastation) were known as “manias”.

Some economists are of the opinion that a bubble cannot be identified before it begins, and thus, that a bubble cannot be prevented from starting. They believe that any measures taken to prevent the formation of a bubble will create a crisis; therefore, it is best to let a bubble form and burst – which, also, will cause a crisis. Not only that, but the subsequent crash can cause long-term economic problems, as shown by the Great Depression of the 1930s, and the housing bubble of earlier this century.

When a bubble has formed, owners of the assets that are the subject of the bubble have the tendency to spend more. Given that their assets are seriously overvalued, these owners feel that they are richer. The housing bubble is one such example. Then, when the bubble bursts, spending is cut and economic growth slows considerably.

Economists have yet to agree on what causes bubbles in the first place. One theory puts forth the idea that they are driven by sociological factors. Another theory is that excessive monetary liquidity creates banks to lend money under unfavorable terms. This, in turn, creates markets that are vulnerable to inflated asset prices driven by speculation. To quote Axel A. Weber, formerly the president of Deutsche Bundesbank, “The past has shown that an overly generous provision of liquidity in global financial markets in connection with a very low level of interest rates promotes the formation of asset-price bubbles.”

In other words, when assets are highly appreciated, economic bubbles tend to occur. When the bubble bursts, as it must, assets fall in price and confidence sinks, which may lead to a financial crisis.

Richard Arthur Kelo– Social Media and Service

We are all currently living in an information age. Because of the internet, we are able to tap into an almost limitless amount of information and data with very little effort. Students are able to research topics without pouring through books, adults can educated themselves on important political matters, and search engines like Google and Yahoo make it easy to filter through this vast amount of information for what we really need. What’s more, with the rise of social media, this information is being spread faster than ever before. Individuals are able to share, not only their own thoughts and feelings, but also the thoughts, feelings, and perspectives of others, by simply pushing the “share” button on any article. In short, the internet and social media are powerful tools that many of our nation’s leaders are now using as platforms for sharing their opinions on science, politics, religion, the economy, and current events.

For economist and financial expert RickKelo, using online presence as social service is something that he takes very seriously. He is a graduate of the United States Military Academy at West Point and as such has a strong sense of nationalism and drive to be involved in and educated individuals about our country. What’s more, he also attended the University of Illinois at Chicago where he received his MBA in Finance. Since receiving his MBA, he has been in the financial industry. He currently works as an Executive Recruiter for TaxScout, the largest tax professional placement service in the country.

This background is what made him realize that social media was a uniquely powerful way to share his perspective on issues relating to the United States economy and politics. However, unlike the thousands of other stuffy blogs out there on the topics, Rick Kelo’s posts are accessible to anyone, whether or not you have a background in economics or an interest in politics. He has posted straightforward articles and posts such as “The Minimum Wage Issue”, “What is the Optimal Progressive Tax?”, “Answering for the 2008 Global Economic Crash”, and “Free Market Capitalism and the Drive Towards Progress”. These posts are geared toward educating individuals on currently relevant topics in our nation’s society. At the same time, he also posts more lighthearted articles such as “Socialism and Star Wars”, in which he describes how the Empire in Star Wars is a perfect example of a socialist state.

For Rick Kelo, education is a priority and using social media is a means of educating the greatest amount of people possible on issues that he feels are important to our daily lives.