Shadow affairs within the US economy

The United States Economy is a complex system. There are many things that go into our economy running well or possibly recessing. I was able to learn what it means to be a part of a system for my Economics, Risking Value course. During this unit, we looked at a book titles “Doughnut Economics - 7 ways to think like a 21st-century economist.” by Kate Raworth. In order for my classmates and I to comprehend each principle, we each learned one and taught it back to each other. I had the fourth chapter, “Get Savvy with Systems”. As well as learning about doughnut economics, we had an external investigation to visit Rheaply, a business built on the concept of having a circular economy. To apply all of the things that I investigated, I elaborated more on an economic perspective. The perspective that I chose was something that I thought about a lot during this course, which is shadow affairs and corruption with the United states economy.

Shadow affairs within the US economy

Summery:
        Whether it's abuse of power or illicit activity, shadow affairs are activities that aren’t accounted for officially in the United States Government or overlooked. This principle will specifically cover exploitation of wealth and power as well as other factors such as fraud, drug transactions, and government corruption. Although black market transactions and wall street transactions seem to be on opposite ends of the spectrum, both can end up being detrimental to everyone else and our economy as a whole. Ultimately, shadow affairs need to be brought into light to have a somewhat fair economy.

MW, Iceberg of the Economy, 2019

Further Context:

        In Doughnut Economics, Kate Raworth talks about how we need to get savvy with systems. Throughout the book she pushes the idea that our thoughts and everything that we know about economics should be questioned.

        Shadow affairs within the US economy is pushing a similar narrative. The underground economy consists of the black market, smuggling, unreported income and more. This actively harms our economy by tampering with official statistics that’s used to determine taxes.

        Black market transactions aren’t the only thing harming our economy. We’re made to believe that the white collar workers on Wall Street are helping our economy grow but its causing more harm simply through their capitalistic traits, often overlooked by the government. There are too many factors that are negatively affecting our economy and there’s no way we will be able to rightfully thrive unless we rethink and directly address these issues. Raworth says “It’s time to stop searching for the economy’s elusive control levers and start stewarding it as an ever evolving complex system.” I believe that we are so used to questioning what so obviously wrong, powerful individuals and institutions have gotten comfortable with the idea of exploitation but what about the unethical role that private banks and financial institutions have in harming our economy? According to the BIS (Bank for international settlements) when private credit becomes larger than the GDP, it slows productivity growth. According to the World Bank data, private credit has reached as high as 206% of our GDP within this decade. This is just one of the many serious indications that we have to holistically account for all things affecting our economy.

       This project seemed simple on the surface but just as the illustration shows, there was more beyond that. As I kept researching different subjects that would add to my principle, I fell down the rabbit hole.The reason that I chose to do my project on this is because I wasn't familiar with any theories or principles that was based on the shadow economy or economic exploitation. This made it harder to put what I wanted to say in words and research my ideas. Nevertheless, it was stimulating to build my argument as if I were a 21st century economist. There are so many things that go into an economy and that’s what this class has taught me. I think the best part of this project was how as I kept researching, I was able to put together information that I learned during a course I took last year called Policy.

Citations-

1) Cecchetti , Stephen Enisse Kharroubi G, and Enisse Kharroub. “BIS Working Papers No 381 Reassessing the Impact of Finance on Growth .” Https://Www.bis.org/Publ/work381.Pdf, Bank for International Settlements, July 2012.

2) “Domestic Credit to Private Sector (% of GDP) - United States.” Data, 2018, https://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS?end=2018&locations=US&start=1960.

3) “Plans: Elizabeth Warren.” Plans | Elizabeth Warren, https://elizabethwarren.com/plans.