Obama warns of taking dramatic steps that could harm economy
Obama scoffs at notion of breaking up largest banks or erecting steep tariffs on imports
By | Associated Press – Thu, Oct 6, 2016 6:16 PM SGT
Erecting steep import tariff may looking appealing, but the consequences is very dire :-
(1) By protecting domestic industries with steep tariff without imports, it means consumers will have to pay a higher price for their goods and services. Also without imports, there will be less choice and lower quality products and services due to lack of competition.
(2) Other Countries will retaliate by imposing similar hefty tariff on American goods and services. As a result, American firms are not able to sell their products and services overseas.
This will lead to lost of American jobs - as global MNCs and business lose its relevancy overseas and result in lost of income (as the World Market is much bigger than domestic market).
(3) Without trade, airports, seaports, logistics, shipping, airline, support industries - will lose its relevancy. Manufacturing line in US will shut down many production lines - as it lose a big overseas market - (billions of consumers) vs 100 millions of domestic Americans.
American jobs will be lost.
Erecting tariff to deter imports is not the solution.
In fact the current global slowdown that impact jobs - is due to lack of more collaboration to encourage trade.
With more trade, there will be more economic activities - which will contribute to higher business activity, higher economic growth, higher demand for jobs and higher income.
The real crux is, how to redistribute income to everyone so that everyone benefit from the globalisation and trade.
By restricting trade will mean less income - and everyone will be poorer and more people will lose jobs - as what is happening to the World Economy now.
The Brexit and Donald Trump phenomenon --- is the result of excesses in raw Capitalism rearing its head.
Majority of the people did not benefit from the growing economic activities - that lead to backlash against the Establishment.
It is notable that World Bank and IMF are taking note and encouraging World Finance and Economic Ministers to address this head-on ---- as it will have repercussion on all the individual Establishment ---- as pulling down a legitimate Government and replace them with someone like Donald Trump ---- is a real possibility like what is manifesting in the current US election.
Raw Capitalism is like a Pyramind, a noose = that is tightening ---- where majority are being choked at the apex downwards. This economic model need to be modified so that everyone will benefit from the Economic fruits.
Unfortunately, many PMETs have lost jobs and are unable to get up on their feet for the past few years.
Look like real viable solutions ---- has still not surface - worldwide.
The following is posted in :-
Friday, December 12, 2014
ricky l • Remove
For the next decades and the next centuries, the World need to tweak the World Economic System - and cannot rely on the current "Raw Capitalism" = in which the main emphasis is "Competition, Intense Competition" - to "kill all competitors" - "winners take all system" --- where the "sole survivors will be those at the apex - and those in middle-class and lower-class will be eliminated" - due to business restructuring, retrenchment, ---- that lead to Economy volatilty, leading to increasingly wider and wider social divide, income divide - that will bring about social instability, economic volatility, job lost, wage stagnation, job instability, high stress level etc - that will bring about "equal miseries" - if the winner that form the apex thinks that they are the "final winners".Reply
The majority losers - will take their miseries to the "winners" - and pull them down - since "you are ok", "i am not ok".
We are already witnessing many World events that are unfolding - across the continents and in many countries :-
(1) Arab Spring - where so many countries embroild in civil wars and a breeding ground for terrorism.
(2) Long ruling Governance losing grounds or fast changing of hands in Governance.
(3) Social unrest in so many cities - across the continents - Wall Street, Arab spring, Chrysatemum movement, demonstration etc.
What is the main cause - that trigger all this ---- the flaw "Raw Capitalism" - that cause the Society to form a very long elongated Pyramid.
Raw Capitalism = Competition = the strongest, the sly, the fittest survive = i ok, you not ok is ok.
Competition - kills Cooperation that "Open and Expand Economic Pie", that "Open Opportunites", that "Expand Business, Investment, Business Profits, Create Jobs, Maintain Niches, Maintain Market Shares" - though Competition ensure "Market Efficiency". But extreme competition - will bring "very small winners" and "kill the rest".
So for the next decades into the next centuries, what should be the Economic Model for the World?
It should be a "Co-operative, Competitive Model" - this harness the best of the 2 Economic System :-
(1) "Co-operation" - open Economic Pie, open Business Opportunities, maintain individual niches - ensure every industries, every organisation there are sufficient rooms to survive, make decent profits, create and maintain jobs.
(2) "Competition" - ensure "market efficiency" - within the framework of "Co-operative competition" - without killing off one another's industries and companies - that keep a decent organisation profits and maintain jobs for the staff and workers.
Only then, it will ensure Society stability, harmony and prosperity - for every Countries in the World (because everyone has a job, can feed themselves, can feed their dependants, can feed their families).
- ricky l • Remove
- Instead of what we are witnessing now in every corners of the World ---- where social divide is acute, income gap is acute, social instability - due to high jobless rate, economic volatility, financial volatility, intense business competition, intense economic competition, raw capitalism rearing the ugly ahead and displacing many majorities and benefitting on the minorities - that lead to society incohesion, conflict and disharmony.
If the World want to see less turmoil, political instability, social incohesiveness, disharmony, festering of terrorist ideologism etc ---- then moving from "Raw Capitalism" toward "Co-operative, Competitive Economic Model" is the way to go.
What is the Fundamental Objective of a Society, of a Country ?
"Ensure every citizen can feed themselves and their families with a decent job and a decent pay - and live in a Society and coexist with others in an environment that is safe, harmonious, and peaceful."
"Not enriching a few individual - at the expense of others - which the current "Raw Capitalism" Economic System - has bring about this outcome" - where the adverse consequences will be political instability, economic volatility and social disharmony or disquiet. Where at the end of the day, the few individuals will also lose their wealth in a disharmonious society. So did "Raw Capitalism" serve the purpose?
In long term - no.
We are already witnessing increasingly - "equal miseries" mode.
Than in this case, shouldn't the World collectively tweak the "Raw Capitalism Economic System" to a "Co-operative, Competitive Economic System" - to ensure every Society, every Countries, every Industries and every Companies - have their own niches to feed every citizens?
Populist political foes of globalisation pose serious risk: G20
Posted 08 Oct 2016 01:27
Updated 08 Oct 2016 04:37
China's finance minister Lou Jiwei has warned of threats to the global economy. (Photo: AFP/Mandel Ngan)
WASHINGTON: The G20 warned on Friday (Oct 7) that populist politicians playing up anti-globalisation and anti-free trade sentiments were putting the global economy at risk.
The grouping of 20 economic powers suggested that the forces that have put Republican Donald Trump within reach of the US presidency and led to Britain's vote to leave the European Union could stall already frail global growth.
While not mentioning Trump or other politicians by name, China's Finance Minister Lou Jiwei, speaking on behalf of the G20, identified such voter-luring populism as one of the largest threats to the economy.
"This trend of deep anti-globalisation populism has driven politicians to come up with their campaign slogans and try to win the votes and support. That has brought us uncertainty," Lou said after a G20 finance ministers meeting.
"We need to recognise some political risks such as the presidential election in some countries and in major economies," he added during the IMF-World Bank annual meetings in Washington.
TRUMP, BREXIT IN FOCUS
Lou's comments came as the US presidential race entered its final weeks with upstart Trump wielding potent anti-immigration, anti-free trade rhetoric in his battle with Democratic rival Hillary Clinton.
But also in the background are the populist currents in Europe behind the Brexit vote and those affecting the coming French and German elections.
In both regions, politicians have made gains touting their opposition to the ambitious transatlantic and transpacific free trade deals, known respectively as TTIP and TPP, potent vote-getters among people worried the deals will cost jobs.
The trend has worried the leaders of the world's largest development institutions, IMF Managing Director Christine Lagarde and World Bank President Jim Yong Kim.
Lagarde said that with the world economy growing at a "sub-par" 3.1 per cent this year, now is not the time to be erecting trade barriers. "Trade has become a political football," she said on Friday.
Kim urged world governments to banish "the storm clouds of isolationism and protectionism," saying that open borders had lifted a billion people out of poverty in over a quarter century.
Few of the powerful economic decision makers in Washington would speak openly about Trump, though he was clearly a key worry.
Pierre Moscovici, the EU economic affairs commissioner, took the issue head on, saying that, in the US election, Trump "is not the most reassuring choice from an economic point of view."
And speaking at a conference on the fringes of the IMF-World Bank meetings, the head of the Institute of International Finance global banking association said the populist rhetoric was impacting markets.
"Policy-makers may be tempted by the siren songs of protectionism and nativism, but a retreat inward would be a break with the principles that have delivered unprecedented progress to literally billions of people throughout the world," said Tim Adams.
At the same time, all the officials acknowledged that, as politicians like Trump have been arguing, globalisation has hurt certain populations and in some cases exacerbated inequality.
"Our research shows that inequality is still far too high, both globally and within countries, constraining growth and breeding instability," Kim said Thursday. "We need to focus on growth and continue to reduce inequality - and we have to make growth more equitable, and more sustainable."
Meanwhile in New York, negotiators on the Transatlantic Trade and Investment Partnership responded to the political attacks on their talks by saying they were determined to push toward a deal, which would establish the world's largest free trade zone.
"We have heard some sceptical voices about TTIP lately, but I want to emphasise that the United States remains fully engaged in these negotiations and is as committed as ever to their success," said chief US negotiator for the United States Dan Mullaney.
His European counterpart Ignacio Garcia Bercero added: "The reasons to continue these talks are as strong as three years ago when we started negotiating this biggest bilateral trade agreement in the world."
- AFP/ec
The Latest: Top UK finance official explains pound's plunge
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WASHINGTON (AP) -- The Latest on global finance meetings (all times local):
12:00 p.m.
Britain's top finance official is suggesting that the plunge of the British pound is due to the growing realization of investors that Britain has decided to leave the European Union.
The British currency suffered one of its biggest tumbles ever Friday, with the currency sliding 6 percent in just a couple of minutes to its lowest level in more than three decades, before rebounding.
British Treasury chief Philip Hammond, in Washington for global finance talks, says some market players have been slow to catch up to Britain's decision in June to leave the EU. Hammond says, "It seems that what's happened this week is that another bunch of them said 'hang on a minute, the UK is leaving the European Union.' "
___
10:55 a.m.
World finance officials are pledging greater cooperation to deal with rising threats to the global economy stemming from increased political attacks on globalization and from Britain's decision in June to leave the European Union.
The Group of 20 major economic powers says it will use all available policy tools to support growth in the face of the increased risks, which continue to roil financial markets.
Chinese Finance Minister Lou Jiwei, the current G-20 chairman, says the risks include the prospect for further interest rate hikes from the Federal Reserve, turbulence from the British vote, geopolitical risks and frequent terror attacks.
Addressing criticism that increased trade has cost jobs, Christine Lagarde, head of the International Monetary Fund, says the wrong response would be to raise tariff barriers to reduce trade flows.
___
8:00 a.m.
World finance officials, still searching for ways to rejuvenate a sluggish global economy, now face the added problem of dealing with a growing anti-trade backlash that threatens to make the economic situation worse.
Officials say the solution is not to abandon support for trade but to make sure the benefits are more widely shared.
Finance ministers and central bank governors from the world's 20 major economies are scheduled to wrap up their talks Friday.
Attacks on globalization have risen in prominence with the June vote in Britain to leave the European Union and the U.S. presidential campaign of Donald Trump.
The G-20 talks were being held in advance of the annual meetings of the 189-nation International Monetary Fund and its sister lending organization, the World Bank.
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