GoFuckYourself.com - Adult Webmaster Forum - View Single Post

jayeff · 02-11-2004, 01:21 AM

European and North American investors predominantly look at the short term. They expect year on year growth. If one company cannot provide that, investors switch their funds to another which can. And why shouldn't they? The economy at large isn't investors' responsibility.

The flaw is that in mature business sectors, continual growth isn't a realistic expectation unless you change the rules of the game. Many companies long since passed the point when they could look to increased sales or improved efficiency to provide the profits that shareholders usually demand. So clothing companies buying cheap imports were among those who led the way and now high-tech businesses are outsourcing their jobs. And why shouldn't they? The economy at large isn't companies' responsibility.

Over the past 30-40 years in particular, there has been a huge shift in business realities. A nominally American company (European companies are no different) will have many - even a majority of - non-US shareholders; it likely operates (as distinct from simply trading) internationally and uses that setup to minimize its US tax liability; many of its former US employees have been replaced by overseas employees or contractors. All good free-market stuff.

Globalisation does mean a slow but steady transfer of wealth from rich to poor countries. But its more immediate impact is to increase the divide between rich and poor at home: shareholders keep increasing their profits, but employees lose their jobs. That isn't just a moral/political issue for a cosy debate. It is very bad news for western economies because the middle class and poor spend most of their money. Thus it is they, not the rich, who keep most markets buoyant and that is why employment, not manufacturing, is the main factor in economic recoveries (which is why since the 1950's, the Democrats have had a more successful economic record than the Republicans).

In the long term, globalisation will mean a huge change in the way we live. Almost all western governments are now caretakers of economies over which they have little influence. And the politicians cannot even talk about the real problems in public, let alone try to resolve them. Here in the US for example, Democrats may be considered left of Republicans, but both parties and their constituents are firm believers in the profit motive as the driving force of society.

The time is nowhere near ripe for any elected politician to try to point out the obvious flaws of the economic system we were brought up to believe in. So as now, GW has to put a positive spin on what is happening. What choice does he have? If his transparently foolish cheerleading gets criticism, imagine the storm if he said that basically we are well on the way to being totally f*cked and there probably isn't a damn thing anyone can do about it.

02-11-2004, 01:21 AM
jayeff Confirmed User Join Date: May 2001 Posts: 2,944	European and North American investors predominantly look at the short term. They expect year on year growth. If one company cannot provide that, investors switch their funds to another which can. And why shouldn't they? The economy at large isn't investors' responsibility. The flaw is that in mature business sectors, continual growth isn't a realistic expectation unless you change the rules of the game. Many companies long since passed the point when they could look to increased sales or improved efficiency to provide the profits that shareholders usually demand. So clothing companies buying cheap imports were among those who led the way and now high-tech businesses are outsourcing their jobs. And why shouldn't they? The economy at large isn't companies' responsibility. Over the past 30-40 years in particular, there has been a huge shift in business realities. A nominally American company (European companies are no different) will have many - even a majority of - non-US shareholders; it likely operates (as distinct from simply trading) internationally and uses that setup to minimize its US tax liability; many of its former US employees have been replaced by overseas employees or contractors. All good free-market stuff. Globalisation does mean a slow but steady transfer of wealth from rich to poor countries. But its more immediate impact is to increase the divide between rich and poor at home: shareholders keep increasing their profits, but employees lose their jobs. That isn't just a moral/political issue for a cosy debate. It is very bad news for western economies because the middle class and poor spend most of their money. Thus it is they, not the rich, who keep most markets buoyant and that is why employment, not manufacturing, is the main factor in economic recoveries (which is why since the 1950's, the Democrats have had a more successful economic record than the Republicans). In the long term, globalisation will mean a huge change in the way we live. Almost all western governments are now caretakers of economies over which they have little influence. And the politicians cannot even talk about the real problems in public, let alone try to resolve them. Here in the US for example, Democrats may be considered left of Republicans, but both parties and their constituents are firm believers in the profit motive as the driving force of society. The time is nowhere near ripe for any elected politician to try to point out the obvious flaws of the economic system we were brought up to believe in. So as now, GW has to put a positive spin on what is happening. What choice does he have? If his transparently foolish cheerleading gets criticism, imagine the storm if he said that basically we are well on the way to being totally f*cked and there probably isn't a damn thing anyone can do about it.