Archive for November 2011

A way out

November 2, 2011

When looking at all the reports about economic troubles around the world there are some very important ones that haven’t gained enough weight in my opinion. Boston Consulting Group reports that increasing cost level in many places – especially China – pushes US corporations to move back to the USA with their manufacturing. This is by the way a wish of President Obama and something GE’s Jeff Immelt has proclaimed in his favorite speech a couple of years back. Not to mention how I have predicted and demanded this as the only true source of recovery for the US economy. We talk about millions of new jobs in the USA but also about billions of dollars to be invested in facilities and capital goods! This would be welcome then the recovery now is slow with growth rate at around 1-2% on quarterly basis, which keeps people (with 9-10% unemployment versus 140 million people employed) at home and not consuming and therefore also not buying homes etc. So, the mid-term future looks bright and can be rated as a green light!

The energy question has turned into USA’s favor as well then besides finding new oil wells in the USA there are now the largest natural gas reserves in the whole world! When we look at the US oil, gas, wind, water, and wave energy sources and reserves we can easily see that the nation can be self-sustained for hundreds of years to come. When improving the energy efficiency in all industries and residential area those reserves will last even longer! This turns also the green light on!

Then there is this Occupy Wall Street – I regard this just a normal phenomenon then when comparing the US system with the Nordic ones in Sweden, Norway, Denmark and Finland, it is pretty much easy to come to conclusion that some changes are needed in the USA. That would not mean any socialism or communism but just a very common social market economy with the basic idea that every human being is valuable and need to have the same opportunity to prosper in life. That means also that higher tax rates will come. It is obvious that it cannot be good or even right, if there is a 1% minority having 90% of nations wealth. I regard this discussion necessary and normal and hope for a positive outcome. Therefore I rate this as a yellow light.

Then there is my hopes and dreams section. If the US, Mexico and Canada (NAFTA) and the EU would work more towards a free and open, and even “common” transatlantic trade zone, what could beat that? Nothing! Low cost labor is available in the East-European countries and Mexico as well as in Southern US States (minimum wage only 10 USD per hour). The highest technology and leading companies are located in these areas. The best schools and universities are also located in this zone. The EU has already a free trade agreement with Mexico and I expect it to get it soon with Canada, but when is the free trade reality between the EU and the USA? That is why I rate this also as a yellow light. For example Mr. Simo Karetie from Central Association of Finnish Industry is favoring this in Prima magazines issue nr. 5 page 10.

The financial crises in some European countries shows only the need for a stronger common fiscal policy and integration. That is not good for all European nations, and therefore each nation should consider whether to be just an economic ally (European Trade Zone) or integrated political wheel in the whole (Member state). I rate this also as a yellow light, and don’t see a real danger here for the world economy.

My last hope is that the growth will be put back into economic policy targets in everywhere, but under the consideration of well-being of citizens and nature.

The balance is now 2 greens and three yellows and no reds. It looks promising!

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