Granted, the economy won't immediately boom. Expecting roaring bull markets and massive profits amongst retailers at this point is still naive. And don't even think about mortgage backed securities now (or ever again, really). The turnaround will be gradual, similar to the rise of the Indy Colts this decade. So don't buy that luxury Bay Area condo with the three-car garage just yet. But don't worry about your job or mutual fund too much either.

SocialYell is an online platform in which users can discuss sustainability issues such as CSR. I interned there last summer, when I wrote this for its blog.

Enter John Thain’s luxurious office suite and you will marvel at his taste for lavish furniture and fine art. According to CNN contributing writer William Cohan, the former Merrill Lynch CEO invested over one million dollars last year in an upscale office renovation. His determination to redecorate his office is admirable, but also reveals a troubling issue. While Thain was busy perfecting his office and releasing billions of dollars in bonuses, the rest of his company was collapsing. At the same time, many other major financial institutions were filing for bankruptcy protection, consolidating, or pursuing government assistance. The United States government hastily implemented a bailout package worth 700 billion dollars to rescue the nation’s largest financial market participants, deemed “too big to let fail.” The sudden government intervention has enraged many citizens who understand the harsh reality: we hard working, average Americans will pay these 700 billion dollars through taxes.

You probably did not approve of or even know about the excessive compensation that Thain and other top administrators at financial services firms awarded themselves. Yet, you bear the accountability of the assistance-seeking millionaires who destroyed their own companies. This sad reality has fueled a nationwide debate on whether America should let companies fail or intervene at the expense of taxpayers who do not control the actions of lending institutions. A Los Angeles Times poll indicated that a majority of respondents opposed such bailouts (McManus). However, we Americans need our largest companies for vital activities including borrowing money from the local bank and trading in used cars. As the government’s primary source of revenue, we cannot overlook the tremendous adverse effect of letting them fail. A financial crash would exacerbate and prolong the current economic recession, affecting everyday Americans mainly by causing severe unemployment. To avoid this catastrophe, we must rescue our collapsing Fortune 500 companies. When rescuing these companies to restore our economy, the government should ensure they use the money properly. Upon granting funds, the government stringently examined the American automakers but inexplicably failed to hold financial institutions responsible, allowing the CEO of an investment bank seeking bankruptcy protection to sanction multimillion-dollar bonuses. For our hard-earned dollars to affect the economy, the government must subject recipients to unsympathetic guidelines and continuous monitoring.

Ordinary citizens seldom notice investing and lending activities, but the collapse of the financial industry would affect us individually. Without a bailout, we will struggle monetarily because of the industry’s prevalence and significance. Personally, the recession and ensuing financial crisis have affected my family and me. We purchased our house nearly 20 years ago for a seemingly great price and now cannot break even on a sale, forcing us to hold onto our largest investment. My family is trapped in an area where we feel uncomfortable with endless mortgage loans, a suddenly commonplace scenario for even the most financially conservative citizens. The subprime mortgage crisis began the financial meltdown, as potential investors could no longer afford houses despite the falling prices that discouraged sellers. Real estate agencies, crippled by unwise previous investments, lacked the funding to supply enough loans to meet investor demand. The United States real estate market lost six trillion dollars in value from September 2006 to September 2008 (Amerman).

In addition to punishing sellers and mortgage applicants, falling housing prices also forecast higher unemployment rates. A New York Times article revealed that America has lost nearly 3.6 million jobs since the recession began in December 2007 (Andrews). This recession has made it nearly impossible for me to find work since graduating high school. From applying for seasonal work at Costco last summer to sending my résumé to JPMorgan Chase for an internship, I have never received a return call, let alone an interview. My friends face the same difficulties, often failing to pay bills after employers lay them off to reduce expenses. While unemployment paychecks protect citizens, the compensation is insufficient for an escalating cost of living and the checks are usually limited to only six months. At the University of Michigan’s Ross School of Business, a Monroe Street Journal survey found that only 77 percent of graduating seniors have received job offers so far this school year. This compares to the 91 percent who had received offers at this time last year (Hurst). Whether someone is a cook at Taco Bell or an accountant at Ernst & Young, job security is a major concern. Struggling companies first cut employees to reduce expenses, explaining the high unemployment rate. A successful bailout package will give firms the funds necessary to expand and thus demand more labor, relieving us from these alarming conditions. If we want to put food on the table and pay the rent on time, then we have to accept the tax hike associated with the financial bailout.

The financial crisis harms the entire nation’s economy because consumers and investors hesitate to spend and invest. Enter the current economic recession, which pundits compare to the Great Depression. During the Depression, nearly one-half of American banks failed, the national unemployment rate skyrocketed to 25 percent, and the government classified over 60 percent of Americans as poor according to the Library of Economics and Liberty (Smiley). Today’s economy exhibits similar statistics. The national unemployment rate is again rising, and is currently at 8.5 percent, the highest in over 25 years (US Bureau of Labor Statistics). Three of the nation’s top five investment banks collapsed in 2008 – Lehman Brothers, Merrill Lynch, and Citi. The insurance provider American International Group, one of the most prominent corporations in the world, suffered a liquidity crisis and lost over 99 billion dollars in 2008 (US Securities and Exchange Commission). Unless Americans take action, these numbers will only worsen. To avert another Great Depression, we need to endorse the bailout packages, pending their stipulations.

Opponents equate bailouts to socialism, robbing innocent Americans to recompense the mortgage brokers and investment bankers whose own greed created their plight. These companies were careless but are still extremely influential in our financial markets and lending systems. If the government denies them assistance, the crisis will spiral into an uncontrollable fiasco. Without funding, our banks cannot support their operating activities and provide citizens with loans. Other companies will inevitably downsize, costing millions of citizens their jobs. Most Americans will support the industry if they consider the alternatives, including mortgage crises and record unemployment. Defending a new 787 billion dollar bailout plan entitled the Economic Stimulus Package, President Barack Obama assured citizens that this is not “your run of the mill recession…. My bottom line is to make sure that we are saving or creating four million jobs, we are making sure that the financial system is working again, that homeowners are getting some relief" (Henry and Paulson). Banks and other lending institutions administer our housing loans, retirement funds, stocks, bonds, and financial aid. Influential banking and mortgage corporations including Bear Stearns, Washington Mutual, and Fannie Mae have already declared bankruptcy or received government assistance, damaging the weakened market. These companies’ downfalls partially generated a 33 percent decline in the Dow Jones Stock Index, drawing increased comparisons to the Great Depression. Despite greater investing, the average 401(k) account lost 27 percent of its worth in 2008 due to the collapse of investment banks (MSN Money). If our banks fail, we will lose the retirement funds saved all the way through our careers, preventing us from retiring on time. Our homes, so heavily invested in, will continue to depreciate dramatically. Our money is already unsafe no matter where we deposit it, with the chance of losing major investments rising. If the government had not immediately reacted to the September Lehman Brothers and Merrill Lynch collapses with the Emergency Economic Stabilization Act, one can only imagine the resulting situation’s severity. We must prevent the bankruptcy of entities responsible for our money, especially since most of these companies are globally active with foreign subsidiaries and foreign investors. Clearly, we have too much at stake to allow our largest companies to fail.

To support bailouts totaling over one trillion dollars, the federal government will need to raise taxes in future years, especially because of the debt incurred from the Iraq and Afghanistan wars. If we want jobs and stable economic conditions in future years, we have no choice but to pay these taxes. Most fund-seeking companies cannot accept government loans because of their hefty liabilities. The government has no option besides taxpayers to support bailout funds. While many of us denounce this new practice, we overlook that rescued companies will help us escape the current economic predicament through lending and hiring. Banks will have the funds to lend to one another, a core activity of our financial system. The banking industry is essential to not only our nation, but also the international economy. Without this industry, governments and investors cannot issue and trade the securities that drive our economy. Circumstances will worsen until companies recapture consumer confidence, an impossible feat under today’s doubtful, fluctuating conditions.

Forcing taxpayers to cover the hefty liabilities of companies is never fair, but desperate times require desperate measures. Citing higher taxes in the future as their primary concern, bailout cynics complain of citizens bearing the responsibility, forgetting that there is no alternative. Higher taxes are a better long-term solution than increased bankruptcy and unemployment rates. In a no-win situation, we should minimize our suffering. Our jobs and the national economy are at stake; a financial meltdown would punish every American far worse than a few extra tax dollars invested toward preventing such a meltdown. However, bailout opponents dispute that they can spend the money more effectively than corporate officials can, and that funding will defer responsibility from the recipients. Consequently, the bankers, mortgage brokers, and refinancers will see no harm in their reprehensible actions. They will continue purchasing multimillion-dollar houses and driving Ferraris to work, eventually creating another financial crisis. After all, John Thain is not the only ravenous executive; the New York Times noted that financial institutions awarded 18 billion dollars in 2008 administrative bonuses while begging for government assistance (White). Bailout funds could be useful if they did not go straight into executives’ wallets, but these executives are too greedy to consider the long-term consequences of their actions. Many banks refuse to discuss their use of the bailout money, clearly attempting to conceal excessive compensation. As long as the companies’ decision-makers have no one to answer to, they have no incentive to renounce their ways.

When Congress approved a 17.4 billion dollar loan to GM and Chrysler, they imposed extremely stringent guidelines on properly allocating the money. To continue receiving funds, both corporations must prove that they can regain a competitive edge, become profitable, and sell unnecessary possessions. They also have to adhere to the remaining guidelines that focus on preserving as many jobs as possible and producing fuel-efficient vehicles to attract a conservative customer base. The loan’s steadfast conditions have forced the automakers to invest in technology that will increase the efficiency of production and gas mileage, displayed by the newest models the 2009 Detroit Auto Show.
The relative success of the automotive bailout suggests that financial bailouts also have potential for success. Taxpayer dollars will not enrich shareholders and executives in a proper bailout. This implies that the government cannot merely send Bank of America or American International Group massive checks and anticipate immediate results. All bailout recipients must appropriately allot the money, proving that they are not as negligent as their past decisions convey. Unfortunately, the Bush administration and former Congress hardly attempted to control recipients’ use of funds. The Obama administration cannot allow the same abuse of taxpayer dollars. To improve the economy and encourage lending amongst banks, the new Economic Stimulus Package must curb recipients’ spending, especially superfluous executive compensation. By provisioning the funds and opting for loans instead of donations whenever possible, we can achieve a reliable bailout system. President Obama understands that the government must use taxpayers’ dollars as effectively as possible. According to the New York Times, the final Economic Stimulus Package actually reduces the burden on citizens with a 70 billion dollar tax cut (Herszehorn and Hulse). If we are resorting to this desperate measure, we cannot allow the misplacement of even a dollar. We need to provision the bailout and Obama will work with Congress to prevent executives from stealing our money. Upon learning that financial executives earned 18 billion dollars in bonuses during 2008 – while begging for bailout funds – Obama labeled their excessive actions “shameful.” He elaborated with Channel News Asia, adding, “What gets people upset, and rightfully so, are executives being rewarded for failure, especially when those rewards are subsidized by US taxpayers” (CNA). To provision the bailout, Obama mandated that companies seeking bailout funds limit administrative compensation to 500,000 dollars and decrease stock options, according to the San Francisco Chronicle. Obama highlighted the executive bonuses in 2008 to notify bailout recipients that he will not tolerate their egocentric actions.
The government needs to mandate strict terms as it did for the automakers to ensure that no infringement occurs, serving as the party that holds corporate decision makers accountable. It should prevent a double standard between automakers and financial institutions. A stricter bailout will stabilize our economy and begin the slow, arduous process of recovery because the companies will use the money to expand and promote lending activities. Major companies will grow independent of government assistance, and consumer confidence will return due to the increase in lending coupled with restrictions on wasteful spending. Finally, firms will increase their business as money flows back and forth between banks and begin hiring workers, reducing unemployment.

As Americans, we cannot sit idly and watch our financial system fail. When Fortune 500 companies file for bankruptcy, the entire nation feels the hardship, from ill-timed investors to laid-off employees. Unlike other economic recessions, the current one has affected jobs in nearly every industry. Especially troubling are the job loss figures in the automotive and financial sectors. Our government appropriately provisioned bailout funds for GM and Chrysler, but not for financial institutions that remain in peril. Millions of Americans realize the importance of our financial system and are willing to help the major companies in distress. While unfair, we must protect our economy or subject ourselves to another Great Depression. However, we must do it the right way, with stringent regulations. Better days lie ahead, but only if we are willing to act.

While default rates are still high (blame unemployment and a lack of financial security), house prices are still low. This sounds like a bad mix - why would anyone invest in an asset with low return and high risk? But all hope is not lost.

Lower prices mean that homes are more affordable. And as the recession enters its last stages, unemployment will begin falling, albeit at a very slow rate. As unemployment falls, consumer confidence and spending will slowly increase again. This means they will be more willing to invest in assets, namely houses. And as anyone familiar with the supply-and-demand framework will tell you, a spike in mortgage demand will cause house prices and interest rates to rise again. In a perfect world, investors would start trading mortgage-backed securities again.

Granted, this cycle would take another five or so years so don't hold your breath waiting for the mortgage-backed market to reemerge. Also, investors would still be wary of buying on the secondary (investor-to-investor) markets, where most of the bad loans are.

The point is simple. Even if the housing market returns to its pre-crisis state, it will not be easy to regain investor confidence. The mortgage-backed security market might become popular again. But it will never be close to what it once was.

After the original collapse, President Franklin D. Roosevelt reacted by signing the Banking Act of 1933, colloquially known as the Glass-Steagall Act. The Glass-Steagall Act prohibited any firm to offer both commercial and investment banking services. Economists and politicians in the post-Depression era blamed such firms for the stock market crash of 1929. According to them, commercial banks should be separated from investment banks because the former grant clients credit, whereas the latter use credit to sell equity on behalf of the client. Proponents of the act saw this as a conflict of interest between the sectors.

To understand this conflict of interest, imagine working for a conglomerate bank. You have just issued a bad loan to a corporation and want to hedge against a default. Thus, you underwrite an initial public offering on behalf of the corporation and begin issuing its shares to investors. The incoming cash flows pay off the loan, transferring the risk to unaware investors.

Of course, investors would catch onto banks that frequently sell risky stock. The bank would lose sales due to the negative public opinion. Critics of Glass-Steagall used this argument to suggest that banks must practice responsible lending and investing practices, whether combined or separate. According to them, this made the act unnecessary.

Glass-Steagall opponents also cited that strictly regulated banks were losing sales to foreign financial institutions not restricted by the act. Domestic banks could not compete as investors began taking their money abroad.

The regulations also undermined the benefits of consolidating commercial and investment banking services. Pure investment banks needed to find external investors to raise capital for their clients. Conglomerate banks could simply underwrite their own funds from the millions or even billions of dollars in their deposit accounts. The synergy gained from operating in both fields would enable them to serve clients much more quickly - and earn much more profit.

In 1999, President Bill Clinton repealed the Glass-Steagall Act for the reasons mentioned above. He was also under pressure from commercial banks, who had already started acquiring investment banks. After the deregulation, mergers between both types of banks became the norm on Wall Street. Most leading banks are now conglomerates, including JPMorgan Chase & Co., which enjoyed tremendous growth immediately after the repeal.

The benefits of the repeal were short-lived. Today's financial crisis struck less than a decade after the removal of Glass-Steagall. Coincidence? Or failure to learn from history? Although Glass-Steagall was not perfect, it was effective. Under the act, the financial sector remained intact and weathered several recessions. The exception came almost immediately after a deregulation act in 1980. That act loosened Glass-Steagall's restrictions and preceded the only financial crisis during Glass-Steagall's tenure. The point? Tampering with Glass-Steagall is just asking for trouble.

But why? What is so special about the 76-year-old act anyway?

Well, for starters, dealing with securities is risky business. Should an investment bank with a commercial arm lose money in capital or derivatives markets, it might not have sufficient funds to cover clients' deposits, causing a liquidity crisis. Depositors might not be able to withdraw their own money. Since the government insures deposits, it would be forced to refund the furious depositors.

Banks that offer both services have greater market share, threatening competition for investments and loans. Also, should a very large bank fail, clients could incur massive losses themselves. Glass-Steagall prevented banks from taking over the market and encouraged healthy competition.

While Glass-Steagall critics argue that conglomerate banks grow much faster, they should consider the long-term implications. Right now, bulge bracket and boutique banks alike are collapsing left and right. While they were better off right after Glass-Steagall, they are suffering in the long run. Steady long-term profits are better than a quick payday followed by bankruptcy filing. Separating services is in the banks' best interests.

Risky investments backfired on investment banks, and their commercial arms are taking some of the punishment. These are the commercial arms in which you safeguard your hard-earned money. Do you really want them to lose this money by dealing in unpredictable securities markets?

Politicians, economists, and analysts are suggesting new policies and regulations to prevent another meltdown in the future. These suggestions all have advantages and disadvantages. A catastrophe of this magnitude has no perfect, clear-cut solution. But if we play our cards right, we can restore America's financial system to its once powerful state.

Two-way video conferencing will likely be a breakthrough feature in the next couple years. The quality of streamed videos continues to improve along with communication methods. Whether or not 3G phones will support this dream remains debatable, however. According to Forbes.com, future phones may double as remote controls, allowing us to control electronic devices such as microwaves, video game consoles, and sound systems. This means that we can heat up a quick meal and blast music without leaving the sofa. The downside might involve an increase in obesity due to laziness. Most impressive about this feature is that it may be touch-free, as the camera will detect and respond to hand motions. New phones will utilize solar energy, offering a method of reducing consumption in a time of energy crisis.

Look for companies such as Nokia and Sony to develop astounding models and compete with the likes of Apple and BlackBerry in coming years. The two manufacturers have invested heavily in research and development while hiring new engineers who will produce the newest technologies. Meanwhile, phones from Apple, BlackBerry, Google, and HTC are only going to improve in coming years as these manufacturers discover new ways to appeal to users. Their engineering teams are certainly capable of creating great advances.

We cannot pick exactly what the new era will bring us. However, we can rest assured that tomorrow's handsets will build on today's features, ensuring us that the upcoming years will give us plenty to talk about. In the meantime, sit back, relax, and enjoy the show of features.

What exactly will this 4G network bring? The answer is more features at faster speeds and more efficient power usage. Experts say that Ultra Mobile Broadband (UMB), a technology driving the 4G network, will enable data transmission speeds up to one gigabyte per second. Wi-Fi and WiMAX will become standard features. Experts predict that these newest mobile devices will offer high-quality video conferencing, improved battery life, and even traffic reports.

Although sure to be impressive, the 4G network is still a work in progress and many experts agree that it will take several years until phones come equipped with this revolutionary technology. Sprint Nextel invested $3 billion in research and development for the breakthrough network and Verizon Wireless is working on their own 4G network.

Meanwhile, a foreign telecommunications service provider, Mena Telecom, seems to have capitalized on the 4G network and is already offering the related WiMAX 802.16e technology. This company is based in Bahrain and will certainly draw attention and profit on their unique services until the competition catches up and the 4G network goes global.

Experts believe that the 4G network will result in an upheaval of the industry with a complete replacement of 3G networks and devices. This means that the current phones we use now will be thrown out and replaced by something far more impressive. Our current technology will soon be outdated in a market where product longevity is impossible. And the phones that we will have in the next decade will be astounding as standards will rise considerably.

My carrier, Verizon Wireless promises no "dead zones" indicating that service is available basically everywhere. However, I do not have enough reception to make or take calls inside most buildings, a problem that my previous Verizon phones did not have. Worse, there are several instances in which my phone will not enough have enough signal strength to send or receive text messages. As I have already said, a phone's primary purpose is to communicate with others in the form of calls and text messages. If a phone is unable to do these elementary functions, then it will lose significant value, even if it is as loaded as the iPhone.

I understand that no electronic device is without faults and still enjoy the company of my Treo. However, the nuisances presented by this phone are excessive and I rarely had them with older models. Perhaps Palm sacrificed its routine functions to satisfy technological concerns. The former is probably as costly whereas the latter attracts far more consumers. Perhaps I became a victim of this scheme, letting the technology entice me enough to forget about the basic necessities. If this is true, then smart phone manufacturers including Palm are simply trying to minimize costs. The trouble is that they shouldn't minimize quality in the process.

Meanwhile, LG, BlackBerry, Samsung, and HTC are constantly improving. In fact, their latest phones are amazing, especially the Samsung Omnia. However, they lack at least one iPhone feature that endeavors to consumers. The newest BlackBerry (Storm 9530) does not have Wi-Fi. The newest Samsung and HTC models lack multiple languages. The iPhone 3G has 8 gigabytes of memory, more than the Storm, Samsung Omnia, and HTC Touch Diamond combined. Above all, the iPhone boasts a sleek and slim design, a feature that made the Motorola RAZR series so popular a few years ago.

As the mobile phone industry expands due to technological advances, a rival will eventually top the iPhone and its successor, the iPhone 3G. However, Apple will likely come out with another powerhouse, perhaps maintaining control over the market. There are already talks of a 4G network in the future and Apple will certainly capitalize on that market. Sprint PCS has already began a project to establish this network, which will enable even faster and more user-friendly web browsing, amongst many other advantages.

The iPhone's superiority is apparent now, but will not last forever. Technological advances will even the playing field, as they have in the past. Eventually, the true "iPhone killer" will arise and seize the market. Will Apple be ready?

The latest mobile phones, including the Apple iPhone 3G, RIM BlackBerry Storm, HTC Touch Diamond, and Google's G1 are examples of this breakthrough technology. These powerhouses appeal to a wide array of consumers. Businesspeople can easily communicate with co-workers and clients thanks to efficient email features and access to wireless service providers. Teenagers can text message one another with less hassle thanks to the surging popularity of QWERTY keypads. A driver on his way to work can calculate the quickest commute thanks to GPS technology.

As the Technology Age progresses, phones will become more user-friendly and powerful. However, this raises many new questions. Although the new features are impressive, many phones (including mine) still experience problems with common tasks such as maintaining battery life and producing solid call quality. Freezing screens are still an issue. These problems irritate users who rely so heavily on their pocket PCs. Do manufacturers such as Samsung and BlackBerry attract more consumers due to their renowned features, while neglecting routine functions and paying no penalty? Why can't more manufacturers produce decent, functional phones? Is there really a tradeoff between technology and dependability?