Michael
SCJP2
I'm just saying...it's right there!
This country runs an astronomical trade deficit
Michael
SCJP2
Monetarism reached the peak of its popularity during the 1970s. In the 80s, however, it suffered a sudden reversal of fortune, and today economists generally agree that "monetarism is dead." Friedman stands virtually alone now among top economists in his belief that it contains any merit.
What happened? Monetarism was tried in Great Britain during the 80s, under Margaret Thatcher, and it proved to be a disaster. For almost seven years, the Bank of England tried its best to make it work. According to monetarist theory, the British economy should have enjoyed low inflation and high stability. But in fact, it went berserk. The economy sank into a deep recession, while lead economic indicators zigged and zagged. Although inflation came down, this was at the price of rising unemployment, which soared from 5.4 to 11.8 percent. Between 1979 and 1984, manufacturing output fell 10 percent, and manufacturing investment fell 30 percent. (5) Eventually production recovered to a respectable 2.8 percent growth, but it became clear that high unemployment was a permanent feature of the British economy. Eventually, the Bank of England came under overwhelming pressure to abandon monetarism, which it did in 1986. The experiment was such a failure that not even conservatives abroad wish to repeat it.
In step with Great Britain, the U.S. Federal Reserve announced in 1979 that it, too, would follow a monetarist policy. Many people blamed the double-digit inflation of the late 70s on Keynesian theory, on too much expansion of the money supply trying to achieve "full employment." Many critics thought that monetarism would restore some responsibility and stability at the Fed. Chairman Paul Volcker apparently agreed, and under the name of monetarism contracted the money supply down to a steady level. This produced a deep recession, but it did cure double-digit inflation.
In 1982, when inflation looked defeated, the Fed suddenly abandoned monetarism and reverted to a Keynesian policy. In that summer it sharply increased the money supply, and a few months later the economy roared to life, in a recovery that would last seven years. Milton Friedman was furious at the betrayal, but he got little sympathy from his fellow economists, who were witnessing a monetarist disaster unfold in Great Britain.
Why did the Fed abandon monetarism? Because it was never really monetarist in the first place. Volcker's strategy to defeat double-digit inflation had been classically Keynesian: reign in the money supply, and accept a deep recession in the process. The "monetarist" label was simply political cover, to mollify the Fed's growing number of critics. Such criticism was not renewed after monetarism failed in Britain, and Keynesian policies produced a seven-year boom in the U.S. The contrasting experience of those two nations was responsible for the demise of Friedman's theory.
Michael
SCJP2
Originally posted by Simon Lee:
2) The US fed will print more money (to maintain domestic supply) so the US get an interest free loan!
...
Most (about 2/3rds) of all physical dollars are not in the US. So that is a huge interest free loan.
In 1982, when inflation looked defeated, the Fed suddenly abandoned monetarism and reverted to a Keynesian policy. In that summer it sharply increased the money supply, and a few months later the economy roared to life
Originally posted by Simon Lee:
Mark - The Fed (not the Gov) can do what the hell it likes. 'Open market operations' sell and buy bonds - when it buys a bond it takes money out of circulation, when it sells bonds it puts money into circulation.
Yeshwantpur
Originally posted by rahul rege:
... American corporates too get the advantage of reduced costs and enhanced competitiveness. This, in turn, translates into higher profits, better returns to shareholders, and larger investments � creating more jobs back home. Isn�t a little pain worth the substantial gain?
Often the most important part of the news is what they didn't tell.
I'm just saying...it's right there!
Originally posted by Axel Janssen:
no. not the same Pakka,
there is a difference between this outsourcing and the outsourcing before.
...
A lot of investment in skills is necesary to become a programmer, consultant, designer, etc. Such investments were better secured in the purchasing power centers of the world before.
So this is a fundamental change.
Originally posted by Axel Janssen:
no. not the same Pakka,
A lot of investment in skills is necesary to become a programmer, consultant, designer, etc. Such investments were better secured in the purchasing power centers of the world before.
So this is a fundamental change.
I'm just saying...it's right there!
Originally posted by Pakka Desi:
There a lot of jobs that requires skills and which cannot be outsourced such as doctors, teachers, nurses. S/w is the only thing which requires lot of skills and can also be outsourced.
Often the most important part of the news is what they didn't tell.
Originally posted by Tim Holloway:
There are a lot of people who think tht more teaching should be done via remote classrooms...
You might be surprised at the number of highly-skilled medical jobs that can be performed over a fast multimedia Internet connection
Michael
SCJP2
Originally posted by Michael Bronshteyn:
For those folks who live in US and think that they are protected from outsourcing by stable jobs or big name college diplomas there is something else to think about. Even if you are going to sustain your income on the same level, the society is going to get poorer.
Originally posted by JiaPei Jen:
1. What is it for? I am going to ask this question to those parents who have worked down to nose to pay their childern's education at the Cambridge, Oxford in UK, the Stanford, Ivy League in the US. For their children to have prestigious jobs for several years and then take whatever can be found in the job market for the rest of the life? Note that the Cambridge, Oxford, Stanford, Ivy League have educated students from all over the world; including students from the outsourcing destination countries.
2. What should I do to make a decent living throughout my life in this global corporatism? All of us are educated to be employees. Most of us only know to say "Oh! Please give me a job." after graduation. Should the school curriculums be revised to blend in entrepreneurship?
3. If I had children, where should I send them for education? What should I do to provide them with relatively better assurance of self sufficiency? I might consider to keep them on a farm to grow vegetable, raise livestock and pray that God would be merciful enough to protect them from nature disasters.
Originally posted by JiaPei Jen:
[QB]
Wall Street is looking to examples such as General Electric Co. GE.N , which shifted software development and back office jobs to XXX under former Chief Executive Jack Welch. Today, XXX engineers are contracted for tasks as sophisticated as analyzing the materials and design of new jet engines.
"If GE can do the advanced research over there on its next generation of jet engines, then there's no reason why that can't be the same case for financial institutions," said Stefan Spohr, a principle in Kearney's financial services division.
[QB]
What about defence related jobs?
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