TM wrote:
To chime in on what William said, the markets are scared now because the economy is in the hands of politicians and politicians are like the UN, noble intentions but little gets done right.
On the note of tech creating jobs in the 1990s under a democratic president was a case of Mr. Clinton's time on office correlating with a new industry being born. To assume that Clinton had a big effect on markets is like arguing that Eisenhower and Truman had a big effect on the markets when the car industry was booming in the post-war US.
The challenge is that the incentives to create jobs in the US are dodgy, because not only a labor costs higher, but the US is doing a piss-poor job at education whereas China has millions of fresh University graduates every year. Corporations can trust that China will continue to create a fresh stream of highly qualified and capable employees for years to come.
China also has a government which isn't made up of what seems to be 80 - 90% lawyers, they have engineers, scientists, economists and so on in their government to a much larger degree. Law is a profession which isn't about who is objectively "right" its about who can argue their view of reality the best and that's not conducive to good politics.
The tech boom stayed in the US because the US had the most qualified graduates that had the competence and knowledge required by the companies. In the US now, you are paying more for people who often have poorer qualifications.
I think politicians are idiots to think they can return the country to 5% unemployment rates. Global competition has changed the landscape irreversibly. The thing is there are humane and inhumane ways of dealing with the present reality. Punishing the most vulnerable members of society by gutting social spending for the purpose of "paying for" new tax cuts for businesses and wealthy individuals (supposedly designed to "create jobs") is the absolute worst way to go IMO.
27 Apr 2012, 11:33 am
