If a financial blunder is incredibly small and no one is there to see it, does it really happen? Well, in our technological age it’s pretty unlikely that would happen. It’s hard to avoid any type of public embarrassment in the age of social media and camera phones. But sometimes a financial atrocity is so large it obstructs your view of it entirely. That’s why in this edition of This Week in Financial Blunders, we focus on mishaps of incredible size, globally and physically.
Poor Money, More Problems
Some people find it easy to dismiss the poor. If someone doesn’t have money to cover their expenses that’s their problem, right? It was their poor money management that got them there in the first place. That’s completely backwards, according to a study published in the journal titled “Science” (later reported by Slate). The study involved two experiments, one to examine poverty-stricken individuals in the first world (U.S.) and another to examine the poverty-stricken in the third world (specifically India). In New Jersey, they asked low- and high-income people to weigh their options on cheap and expensive car repairs. The results found that high-income people scored better on both tests, and those with low income scored the worst (as in, making poor financial decisions) when faced with an expensive car repair.
In Tamil Nadu, India, the researchers gave sugarcane farmers “cognitive tests” before and after their harvest (sugarcane being a cash crop). The results echoed the same test done in the United States: Farmers with a strong harvest scored better than poor farmers before the harvest.
The study leaves one to assume that the poor have been misconstrued for a long time. Considering other studies show the negative effects of stress and poverty already out in the world, poverty may be more of a slippery slope than originally thought.
The entire town of Rosia Montana in Romania might see cyanide and gold heading their way, but not if its citizens have anything to say about it. In a story that sounds like a Captain Planet episode horribly realized, Romanian President Traian Basescu set a proposal that would allow Canadian mining company Gabriel Resources to set up Europe’s largest gold mine, using cyanide as the method of mining said gold. Thousands of protestors rallied against this decision, forcing the president to consider a referendum that may postpone the project. If the project is approved, Gabriel Industries would yield a 25% stake in the mine and 6% of royalties would go to Romania, but at the cost of opening up a mine so large it would be visible from space with near certain environmental hazards from the use of cyanide. Supporters of the mine argue it would bring significant job growth and revenue to the country. Protests are expected to continue while the proposal is debated in parliament over the next few weeks.
Those are the heaviest blunders discovered in the first week of September. If you have any more to add, please comment below.