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Politics : Don't Blame Me, I Voted For Kerry -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (5846)	3/8/2004 9:10:32 PM
From: Lizzie Tudor	Respond to of 81568

another economist who sees little US job growth for all of 04 + no relationship between salaries and corporate profits (in other words this is as good as it gets in the Bush economy): US recovery is creating jobs, just not in the US The markets hoped they'd get an elephant but, in fact, they got a mouse that sent the dollar lower Economics textbooks have, in the past, ignored this phenomenon, assuming for the most part that labour is mobile but capital is not. But with the collapse in communication charges around the world associated with the introduction of new communications technologies, this assumption is no longer safe. If capital is now a lot more mobile, economic expansion is likely to look very different from the past. My hunch is that the payrolls figures will remain soft throughout 2004. Yes, the markets will continue to look for "The Big One". Some people will continue to argue that inflation is just around the corner. And speculation over when the Federal Reserve will raise interest rates will not die away. These hopes and fears may, however, prove to be nothing more than that: just hopes and fears. If companies are doing well precisely because of their ability to outsource and offshore, it makes no sense whatsoever to expect a recovery in corporate profits to feed through to a recovery in workers' incomes. In this Brave New World, profit strength - and labour market strength in China and India - may be driven by exactly the same processes that are giving rise to labour market weakness in the US. news.independent.co.uk