GLOBAL OUTLOOK

The French Government and Economy are in Turmoil… Again

Marcus Gonzalez, ‘28

Facing a budget crisis and a crippling lack of economic growth, the French government decided that when it rains it should pour and ousted their prime minister on Wednesday.

In a historic no-confidence vote, far-right and far-left politicians joined together to end Prime Minister Barnier’s three-month-old government making it the shortest government in the history of the Fifth French Republic. The French parliament has not passed a no-confidence vote in over 60 years adding more stakes and drama to the political system in the country. Michel Barnier’s deposement represents France’s increasing resentment towards centrist politicians like President Macron and Mr. Barnier as the cost-of-living soars and high interest rates threaten widespread unemployment. 

The legislation of contention that led to the government’s collapse was the proposed French budget for 2025. Barnier’s government had wanted to include significant austerity measures worth almost $60 billion dollars by increasing taxes and cutting the budgets of certain programs. These measures drew substantial criticism from both the right and left who claimed that this budget was “profoundly unjust” to the public despite numerous concessions from the centrists. As the no-confidence vote cancelled out the budget proposal, the government will continue on its 2024 budget which experts project will inflate the annual deficit to 6.1% of GDP which is two times greater than the limit asserted by the European Union. Additionally, its debt is already 112% of its GDP which is also double the limit that is set by the EU. For context, the US has a GDP to debt ratio of 120% while China’s is 84%. 

The primary cause of this ballooning deficit is President Macron’s government spending in the post-pandemic era. This, coupled with ever-increasing energy costs, have soured the economic outlook for the country which led to businesses cutting back employment. This spike in unemployment spooked consumers into prioritizing their savings, therefore hurting the country’s economic activity. This economic uncertainty has prompted investors to sell French bonds and stocks which has only exacerbated the dire situation. Before the budget talks collapsed, experts estimated that the country would see economic growth of about 0.8%, now economists caution that this estimate is overly optimistic.

At the core of this issue remains the splintered remains of the French political system, with leftist, far-right, and centrist politicians battling it out for supremacy. This fight has meant that criticizing the current ruling party remains more popular than fixing the situation, while necessary austerity measures are ignored and set aside.

So what exactly is happening in South Korea?

Mateo Alvarez Vergara, ‘27

You might have heard the news that the South Korean president was declaring martial law and wondered, what exactly is going on in the Land of the Morning Calm? Last Tuesday night, President Yoon Suk Yeol issued a surprise martial law declaration, which he argued was to rid the country of “North Korean communist forces” and “anti state forces”, however the underlying reasons appear to be political in nature. For starters, Yoon, who won very narrowly won the election in 2022, has had to battle with the opposing party controlling the National Assembly (the South Korean version of Congress), which has essentially stifled all presidential control of the country. Yoon has also faced corruption scandals including one involving his wife’s alleged stock manipulation. The martial law declaration granted the president and the military broad powers, including the ability to prohibit political activities, censor media, and arrest individuals without warrants. Nonetheless as soon as Yoon announced martial law thousands of South Koreans took to the streets to protest violating the mandate, as well as the army storming the National Assembly to stop lawmakers from voting on it.  Nonetheless the martial law mandate was short lived, as members of the National Assembly voted unanimously to repeal the mandate at dawn on Wednesday, after which Yoon reluctantly backed down and revoked his own mandate. Despite this South Korea lived 6 hours of national shock and bewilderment. 

The opposition waited no time and submitted a bill to impeach the president, to do so they would need two thirds of the Assembly to pass the bill, and despite holding the majority of seats they would need at least 8 lawmakers from Yoon’s party to defect. On Saturday the Assembly held a vote which was boycotted by the PPP (Yoon’s party), thwarting the possibility of impeachment. President Yoon also appeared on Saturday to give a public apology on his first public appearance since the martial law declaration. The South Korean president proclaimed that “I leave it up to my party to take steps to stabilize the political situation in the future, including the issue of my term in office”. In response to this his party’s leader Han Dong-hoon had decided that Yoon would resign in an orderly fashion. Han mentioned in a press conference that until Yoon leaves he would be “Effectively excluded from his duties and the prime minister will consult with the party to manage state affairs”.

This would not make the first time a South Korean president is deposed, at least half of all modern South Korean presidents have been either impeached or jailed, the last one being in 2018. In a nation where political drama is no stranger to the headlines, the fleeting imposition of martial law under Yoon Suk Yeol marks another chapter in South Korea's turbulent democratic journey, leaving its citizens and lawmakers grappling with the precarious balance between power and accountability.

The Georgian Dream: Dead or Alive?

Marcus Gonzalez, ‘28

On November 28th, in Georgia (the European country and not the American state), the right-wing ruling party, Georgian Dream, stated that it would suspend all attempts to join the EU until at least 2028. This announcement triggered widespread and ongoing protests across the country and substantial resignations within Prime Minister Kobakhidze’s government. 

This has been seen as a national betrayal and manipulation by the pro-russian political party as EU membership is seen as a popular idea and is also required by the Georgian constitution. Several polls have shown that over 80% of Georgians believe that joining the EU would be a benefit to their country. Moreover, the current ruling party has been embroiled in controversy as it recently passed unconstitutional legislation targeting the LGBTQ community and the independent press. These unpopular bills have been pushed through by what appears to many as unwelcome Russian influence in Georgian politics as the increasingly unpopular Georgian government continues to maintain power through questionable election security and extremist disinformation. Recently, probes into the October election in the country were swiftly shut down by their Supreme Court despite numerous testimonies from internal and external election observers that there were voting irregularities.

These measures and policies evidently became too much for a large portion of Georgians which has led to mass protests and uprisings throughout the country, with protestors being violently suppressed by the police. So far, over 300 people have been jailed, with over 100 being treated for injuries. In the wake of these protests, the government has raided houses and offices of the opposition party, one of these opposition parties, Coalition for Change, had its leader dragged out of his office by police and taken away in a police car. In response to the public’s outcry against these raids, the Prime Minister said “I wouldn’t call this repression; it is more of a preventive measure.” 

While Georgian democracy never truly consolidated after its independence in 1991, many experts believed that the country’s positioning as a potential EU member would strengthen its commitment to democracy and liberty. With thousands of people protesting every night, the only question that remains is if the government will follow the wishes of the people, or if they will continue down the path of repression and authoritarianism.

MACRO

Black Friday’s Impact and Evolution

Rachel Wanagosit, ‘27

Black Friday, the biggest shopping day of the year, marks the official start of the consumerism that comes with the holiday season. The sales figures from the holiday are often considered an indicator of the country's overall economic health. This year’s stats have some key findings:

• Cyber Monday brought in more purchases than Black Friday.

  • Since 2021, Cyber Monday has surpassed Black Friday.

• Cyber Monday resulted in larger purchases.

  • Shoppers showed a willingness to spend more in a single online shopping cart.

  • Purchases greater than $500 increased by 44%.

• Prices were only slightly lower.

  • More promotion offerings than ever, but Spreetail found that the average deal was only 1.5% lower compared to last year's offerings

  • Durable goods (goods that last a long time, usually more than three years–like phones or TVs) were 10% lower compared to 2023.

• Black Friday starts on Wednesday.

  • Spretail saw a 110% increase in traffic starting on Wednesday through Black Friday, resulting in 2.5 million additional visitors shopping for holiday deals.

  • Black Friday retailers expanding this holiday deal is similar to how Starbucks has extended the availability of the “seasonal” pumpkin spice latte, where each year they extend the season a little more.

• Amazon’s Black Friday week and Cyber Monday had record sales.

  • Their 12-day sale from Nov.21- Dec.2 saw record sales, including record sales of individual items. 60% of these sales are generated for independent sellers.

• Increase in AI use:

  • Retail sites saw an 1800% increase in traffic from AI tools like ChatGPT, indicating our increasing reliance on tech for finding the best deals.

Black Friday has evolved since the days when people would stand outside in the freezing cold at 3:00 am to get 60% off a TV. By 2024, many deals have been watered down, and much of it shifted online. Black Friday online shopping bringin in $10.8 billion this year, a 10.2% increase from 2023. Regardless, it is still the biggest shopping day of the year, which brings a lot of dollars not just to retailers but to local coffee shops and movie theaters. The difference is that the revenue Black Friday brought may now be spread out over days or weeks during the holiday season. 

Bitcoin Be Ballin’: The Crypto Godfather Crosses $100,000 in Value

Armaan Karnad, ‘28

As of December 4th, 2024, the price for 1 Bitcoin crossed $100,000 (NBC). In more relevant terms, 4 Bitcoins can afford 4 years here at Fordham. 

Historically, Bitcoin’s price has been driven by halving and investors’ confidence. The former variable is a hard-coded procedure that reduces the number of Bitcoins awarded by half every four years. The halving protocol effectively slows supply growth over time, preventing Bitcoin from experiencing inflation to the same extent as traditional fiat currencies (hope you paid attention in econ). The most recent Bitcoin halving occurred on April 20, 2024 (CoinLedger). The latter element is far more volatile as it depends on the actions of many players, including governments, the public, financial institutions, and currency markets. For instance, during presidential elections, the price of Bitcoin rises as fears over the dollar's collapse mount due to higher political tensions. 

Since the presidential election and halving process were expected to happen, Bitcoin’s price naturally rose in 2024. Donald Trump’s crypto reserve proposal served as a wild card. This announcement was huge since it effectively signaled the U.S. government's confidence in cryptocurrency. With Uncle Sam’s backing, it’s no wonder Bitcoin’s price is soaring like a bald eagle. 

Bricks, Tariffs, and Labor Woes: Construction’s Big Problem

Francesca Bolastig, ‘27

McKinney, Texas, is known for growing into a booming suburb with over 200,000 residents, from being a small town with a two-lane highway with the help of extensive new construction. Many small towns have grown into suburban communities with the help of the construction industry, which relies heavily on imported labor, steel, and lumber. 

However, the construction industry is now incredibly vulnerable to President-elect Donald Trump’s new proposed policies, precisely the policy that includes deporting undocumented immigrants and introducing new tariffs on countries Mexico and Canada. 

Longtime Texas developer and Mckinney’s mayor, George Fuller, acknowledged the industry’s dependence on immigrant labor and discussed the significant impacts that deportations and tariffs will have on the communities that the construction industry has assisted in flourishing. 

Fuller says, “We will absolutely have a shortage. Whether you want to acknowledge it or not, these industries depend on immigrant labor.” As a Raegan Republican, Fuller supports having documented workers and implementing more U.S.-produced materials in U.S.-based projects but believes that using heavy-handed deportations and tariffs to achieve those ends is a painful way to achieve those goals. 

According to Riordan Frost, a senior research analyst at the Harvard Joint Center for Housing Studies, immigrants comprise more than half of construction trade workers in multiple states, such as Texas, California, New Jersey, and the District of Columbia. Undocumented workers constitute around 13% of the construction workforce compared to the 5% overall workforce, according to the Pew Research Center. 

Trump says that he would support the construction industry by easing regulations and allowing more building on federal land – but many economists and builders argue that the loss in the immigrant workforce would drive the cost of wages up for some positions and leave positions unfilled. 

Trump has also threatened 25% levies on imports from Canada and Mexico, which would increase the cost of construction materials. According to the National Association of Home Builders, about 7.3% of home-building materials are imported. Additionally, imported materials, such as softwood lumber, iron, steel, cement, and gypsum, are crucial to the construction industry's success. Imposing tariffs will mean that the cost of these home-building materials will skyrocket. The rising material costs and labor shortages would undoubtedly increase home prices, exacerbating already stretched housing affordability.

Deportations during 2008-2013 already caused a labor shortage, raising home prices by 20%. Builders today fear similar effects under these proposed policies. 

The construction industry grapples with these potential hindrances to its growth. Yet, there is growing advocacy for reforms, such as creating pathways to legal status for undocumented workers and addressing current vulnerabilities to supply, to ensure that the construction industry can remain resistant and capable of meeting the nation’s ever-so-evolving housing needs. 

TECH

TikTok Shop Gains Momentum, Challenges E-Commerce Titans

Carson Panter, ‘28

TikTok Shop is reshaping e-commerce with a striking performance this holiday season, pulling in over $100 million in Black Friday sales last week. Since its launch 15 months ago, the platform has attracted major brands like Nike and Crocs, offering retailers low fees and massive reach to its 170 million U.S. users. Analysts expect TikTok Shop to double its annual revenue to $50 billion, a small figure compared to Amazon's projected $757 billion but indicative of rising competition.

Live Shopping: The Key to TikTok’s Growth

One standout element of TikTok Shop’s success is live shopping. Over 30,000 livestream sessions on Black Friday enabled content creators and retailers to generate millions in sales. Inspired by its Chinese counterpart Douyin, which amassed over $200 billion through livestreams last year, TikTok hopes to replicate this trend in the U.S. While Meta and Amazon have failed in their live shopping ventures, TikTok’s integration with its content-first ecosystem might be the key to unlocking consumer engagement.

Economic Implications

• E-Commerce Disruption: TikTok’s rise challenges traditional players like Amazon by reshaping consumer buying habits. Its low-cost, entertainment-driven shopping model pressures incumbents to innovate.

• Opportunities for Retailers: Smaller sellers and major brands alike benefit from TikTok’s viral content and direct access to Gen Z and Millennial consumers, diversifying their e-commerce strategies.

• Regulatory Risks: A potential U.S. ban as early as January could threaten TikTok Shop’s growth, creating uncertainty for retailers relying on its platform.

Big Picture

TikTok’s pivot from social media to e-commerce powerhouse signals a shift in how consumers discover and purchase products. With its unique blend of entertainment and commerce, TikTok Shop is a rising force in the digital marketplace, even as it faces looming challenges from regulators and competitors. Whether it can sustain this momentum remains to be seen.