|
Sunday, January 22, 2012
"Currency Wars"
Check my new review of James Rickards new book, Currency Wars - The Making of the Next Global
Crisis, http://www.thepurplemuse.com/id48.html.
Currency Wars is one of the most important business books written in the past few years.
I ecourage everyone that cares about the future of the US to read Currency Wars.
TPM
Wednesday, January 18, 2012
Is the US Ready to Compete?
Every day I watch debates between politicians, political commentators and the general media
about who is responsible for the loss of jobs during the past few years and what leaders best suited to create more
jobs in the USA. Everybody wants to compare their job creation records or lay blame on someone in the US for the job
loss. Nobody addresses in depth the real issue that is the primary cause of the job loss.
A confluence of
factors that occurred about 20 years ago opened global markets and trade for significant expansion. Low cost labor
pools and business friendly government policies in many countries created the opportunity for new businesses to be created
and for existing businesses to be relocated from high cost to low cost areas of the world. These events occurred
at a time when the US was becoming less business friendly. Federal and state regulations began to materially impact
the ability of many companies to compete in their markets. California, once the premier growth state in the US, became
one of the most difficult states to start and operate a business. Businesses fled from California to escape the gross
overreaching policies of the California state government. The economic/business competition (battle?) between nations
accelerated dramatically. The impact on many US unskilled and semiskilled workers was significant. The companies
they worked for could no longer compete. Their companies went out of business or moved their operations to some
other country.
As the US chugs forward in a low growth environment and builds up a huge federal government
debt, the people must face up to the big question. Is the US ready to really compete again in the global market?
The only reason the US unemployment rate is only about 8.5 percent is that the US government is running a $1T
plus annual deficit. The jobless rate doesn't include a large number of people that are underemployed
or have dropped out of the work force. If the deficit was zero the US unemployment rate would be much
higher. We are sustaining hundreds of thousands of jobs in an uncompetitive economy by taking on debt
at the federal level and printing fiat money at the Federal Reserve. The US has failed to address the big issue of global
competition.
If the US wants to restore its global competitiveness, it must fundamentally change the cost structure
for businesses. This means changing tax policy, work rules, environmental policy strategy, and employee compensation
standards. The social safety net must be substantially reduced in order to incentivize people to work in a globally
competitive environment. Liberal progressives will rebel at these ideas. However, there is no other approach
that works. The high cost, difficult working environment countries like the US will not be able to maintain low
unemployment rates if they can't compete effectively in the world market.
The US needs a massive change
in attitude towards competing in global markets. Will we step up and do it?
TPM
11:34 pm
Monday, January 2, 2012
Washington Post Business Section - January 1, 2012
12:18 am
|
