Global Economy (merged)

[GoIllini]

Interesting article...


The Great Global Buyout Bubble
http://www.nytimes.com/2005/11/13/business/yourmoney/13buyout.html

...
"There's no question this is going to end badly for some," said Colin C. Blaydon, a professor at the Tuck School of Management at Dartmouth and the dean emeritus of its Center for Private Equity and Entrepreneurship. "It's almost a classic boom-bust cycle. When you see a big boom, people see the returns, go rushing in, stuff more money in than can be dealt with. Suddenly, something will happen that makes people say: 'Oh, my God! Look at the leverage we've got on these things. Isn't this way too risky? Shouldn't we pull back?' And then the question becomes: Does it crash like a rock or is there an adjustment down over time?"

ALREADY, there are reminders that the business can turn ugly overnight. Thomas H. Lee Partners, the Boston private equity firm famed for buying Snapple for $135 million in 1992 and selling it two years later to Quaker Oats for $1.7 billion, recently was badly burned on its investment in Refco, the commodities trader that filed for bankruptcy protection last month. While the setback has hardly sunk the Lee firm, it is an illustration of how risky these investments can be.
...

[/url]

I see this as good news. If the buyout firms are holding $100 Billion in cash, this means the country isn't in as quite as much debt as we had thought.

We get a recession when everyone's in way too much debt. We get higher wages and lower prices when everyone but large corporations are in debt.

[CARVER]

... We get a recession when everyone's in way too much debt. We get higher wages and lower prices when everyone but large corporations are in debt.

You completely lost me here (or maybe you were being sarcastic), could you explain this please?

"Everyone in way too much debt", there must be someone on the other side of that balance sheet?

Why would we get higher wages and lower prices when everyone but large corporations are in debt? Wouldn't they just pay it as dividend to their shareholders? Or buy-back stocks? Why would they just give it away for free to us, by giving us higher wages? It is not like there is a huge demand for workers or anything. Most large companies are restructuring which involves mass layoffs. I don't think the shareholders will agree when they say that they will not pay dividend but instead give it away to the employees and the customers by increasing wages and lowering prices.

Those large corporations do not need all of us anymore. They have got our money and assets already. They don't need our labor because they are already producing enough for all those people that still have money and assets.

They are not going to give us more money, just because they have it, so that we can waste their valuable limited resources.

They can just dump a part of the workforce and the production capacity and continue on a smaller scale with a smaller group of 'paticipants', so that they have more resources available for themselves.

[grabby]

Interesting article...


The Great Global Buyout Bubble
http://www.nytimes.com/2005/11/13/business/yourmoney/13buyout.html

...
"There's no question this is going to end badly for some," said Colin C.
...

[/url]

I see this as good news. If the buyout firms are holding $100 Billion in cash, this means the country isn't in as quite as much debt as we had thought.

.

Get out of debt. That is a good plan.

[Carlhole]

“Competitive policy” needs to be subordinate to “vital policy”

St. Gallen economist Peter Ulrich demands global economy founded on ethical standards.

World-wide desolation is being caused by unrestrained globalization, free-floating capital, and the exploitation of millions of slave workers. Ever since China started playing a strong role on the world stage with its cheapest labour force of almost one billion workers entering the global market, the rich countries in the northern hemisphere have been alerted. Can one compete with a dictatorship like China? Has the concept of economic liberalism reversed itself? Wrong, says Peter Ulrich, who holds a chair in Business Ethics at the University of St. Gallen, Switzerland, and is director of the Institute for Business Ethics at this university. He calls the idea of the “invisible hand”, i.e. the assumption that private profit maximization will lead to prosperity for all, “nirvana economics”. This “metaphysical social welfare fiction,” supported by economic liberalism and today’s Neo-liberals, was to be unveiled long ago. And furthermore, the question is not whether one “can” compete with a dictatorship but whether one “wants” to do so, whether this is morally justifiable and desirable. His answer is a clear No.

Ulrich demands a system that is superordinate to mere competition policy, a framework which the German Ordoliberals around Alexander Ruestow and Wilhelm Roepke named “Vitalpolitik” [vital policy]: What is needed today are UN institutions which represent the humanitarian, social, cultural and ecological points of view in contrast to the pure profit maximization ideology of the WTO, the IMF and the World Bank. To put it bluntly: Yes, to trade with China, but the people here and there must be able to live a self-determined life in dignity as citizens within a state and an economy.

[TommyJefferson]

What is needed today are UN institutions which represent the humanitarian, social, cultural and ecological points of view in contrast to the pure profit maximization ideology of the WTO, the IMF and the World Bank.

Hmmm. A world-wide governmnet that could accomplish these goals:

1. Defeating the right-wing agenda of the Bush Administration.

2. Winning a wide-ranging program of reforms that put the well being of the people before private profits.

3. Eventually replacing big business with labor and its allies as the dominant power so as to insure that the rights, economic security and expanding needs of the people become the overriding concern of society.


See: http://www.cpusa.org/article/archive/11/

[MrBill]

There is no conflict in interest between an efficient economy and an ethical economy. Both are possible. However, then consumers will have to save and invest in sustainable technologies, while paying more for everything they consume to reflect their true cost to find, mine, manufacture, recycle, dispose, etc. How they achieve this while preventing others from cheating is a matter for government not for economics. I assume here that the behavior of the government reflects the will of the people. Is it the role of economics to protect jobs in rich world countries or provide jobs in low income countries? If you tell me which is more important, then I can recommend you specific policies. So long as you say both are equally important, then we have a trade off in public policy.

[rogerhb]

If you tell me which is more important, then I can recommend you specific policies. So long as you say both are equally important, then we have a trade off in public policy.

Currently its "Guns before butter".

[jaws]

Him and everybody else.

I have to laugh every time someone says "what is needed is [such and such omnipotent government agency]." As if that were possible! I could as well say what is needed is a perfectly kind, omniscient, all-encompassing global hive mind and all our troubles will be resolved.

[Zardoz]

And we think it's only the Chinese and Indian yuppies who are going to be chewing up resources. Not only are we racing toward a cliff, we're accelerating our pace. It's like we want to see how far out into the canyon we can fly. The "hard landing" may be harsh beyond anything even the most pessimistic doom-and-gloomers can imagine:

The global economy is on a growth streak that is shaping up to be the broadest and strongest expansion in more than three decades.
__________________________________________

Emerging Nations Powering Global Economic Boom

The expansion is the strongest since the 1970s, with China, India and Russia setting the pace. But many U.S. workers are left behind.

By Tom Petruno, Los Angeles Times Staff Writer

May 14, 2006

The global economy is on a growth streak that is shaping up to be the broadest and strongest expansion in more than three decades.

Rising spending and investment by consumers and businesses worldwide are boosting national economies on every continent, pushing down unemployment rates in many countries and lifting business earnings and confidence.

{edited by MQ...do not post entire articles, link to them...see the COC.}
{title edited by Shannymara}

[Heineken]

Let's not forget, too, that world population continues to grow by 200,000 people per day, net of deaths. This outstrips any possible contributions from alternative energy and conservation.

[thor]

Now that Chindians are putting their lifetstyles into gear simply implies an accelerated decline of oil and gas reserves. No matter what (educated) fools say about a smooth transition through alternatives. It ain't gonna happen, mother Nature is in the locker room and about to participate in the game. Buckle up.

[PolestaR]

Let's not forget, too, that world population continues to grow by 200,000 people per day, net of deaths. This outstrips any possible contributions from alternative energy and conservation.

Population growth doesn't necessarily mean peak oil gets here quicker. It's only when that population starts to use more oil that it is a concern. How many years did we go by without China being an oil concern?

[seldom_seen]

The harder they come the harder they fall, one and all.

[Dreamtwister]

Population growth doesn't necessarily mean peak oil gets here quicker. It's only when that population starts to use more oil that it is a concern. How many years did we go by without China being an oil concern?

Those 200,000 people gotta eat something, and there's an extremely high probability that something is grown with chemical fertilizers, pesticides, powered irigation and mechanical harvesting. In other words, oil.

[Zardoz]

{edited by MQ...do not post entire articles, link to them...see the COC.}

Okay, no problem. The only reason I posted the whole thing is that most L.A. Times stories get moved behind their "archive" paywall after 24 hours. If that happens to this one, can I post more excerpts so that those seeing it for the first time could get the gist of the story?

[Heineken]

Let's not forget, too, that world population continues to grow by 200,000 people per day, net of deaths. This outstrips any possible contributions from alternative energy and conservation.

Population growth doesn't necessarily mean peak oil gets here quicker. It's only when that population starts to use more oil that it is a concern. How many years did we go by without China being an oil concern?

Well, it's happening from both ends---both the population is growing and the proportion of the population that visits McDonald's drive-ins is growing. A double-whammy that wipes out gains from alt fuels.

[lorenzo]

Let's not forget, too, that world population continues to grow by 200,000 people per day, net of deaths. This outstrips any possible contributions from alternative energy and conservation.

Yes, but let's not forget that we only have to be patient for 2 decades. In 2030, humanity will have reached its historic population peak, after which it declines.

So be patient, it's a matter of a few years.

Meanwhile, there's so much progress to make. For example, America can slash its oil consumption by half, merely be being more fuel efficient, cheap sexy 200mpg cars are on their way and will be introduced fairly soon, bioenergy can supply up to anywhere between 25 and 50% of world energy consumption without endangering (the need for increased) food production, etc....

Really, the big fat sign over there on that graph, reading "In 2030, the world's population stops growing and starts to decline", should really work on us like a red piece of cloth works on an excited bull.

I can't wait to celebrate our inventiveness and creativity, and how we will have eradicated most poverty, brought most people a nice standard of living, while having oil to spare... all this is possible. We now have a target - 2030 - and we can plan towards it. We just have to do it.

[AirlinePilot]

For example, America can slash its oil consumption by half, merely be being more fuel efficient, cheap sexy 200mpg cars are on their way and will be introduced fairly soon, bioenergy can supply up to anywhere between 25 and 50% of world energy consumption without endangering (the need for increased) food production, etc....

Lorenzo,

Exactly what kind of drugs do you do before you post? You obviuosly have absolutely no clue as to what is going on here in the states. We are a locomotive running down the track with no brakes. We are a supertanker without a rudder. Changing direction and velocity at this point is too late.

Your out of time and so are we, enjoy these last few years as best you can.

SNAP OUT OF IT!

[MonteQuest]

{edited by MQ...do not post entire articles, link to them...see the COC.}

Okay, no problem. The only reason I posted the whole thing is that most L.A. Times stories get moved behind their "archive" paywall after 24 hours. If that happens to this one, can I post more excerpts so that those seeing it for the first time could get the gist of the story?

Yes, if it can't be linked to, you may post all of it.

[Zardoz]

...I can't wait to celebrate our inventiveness and creativity, and how we will have eradicated most poverty, brought most people a nice standard of living, while having oil to spare... all this is possible...

Exactly what kind of drugs do you do before you post?

How else can anyone respond?

We're losing you, lorenzo, and you're losing us.