The Euro and the Company

Now maybe David is sitting there today asking himself just what the hell that post of Edward’s on outsouring in the US had to do with a European centred blog. Well the answer didn’t take long in reaching us: the euro rose to a fresh record above $1.29 today as upbeat U.S. data yesterday failed to diminish the bearish view of the greenback and off it went to new multi-year lows against a range of other currencies (this should make us ask ourselves what may happen if we get a run of bad data).

And just what has this got to do with outsourcing? Well we seem to be on a conveyorbelt at the moment, one which stretches all the way though Asia across the US and then on over to Europe. What this is producing is ‘weakness’ in the US labour market, an intractable US trade deficit, and interest rates at historic lows. Which means of course that the dollar keeps on falling, and the euro keeps on rising. Until…….
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Outsourcing and the Global Optimum

The last week has seen the ‘great US ousourcing debate’ hit both new highs, and new lows. On the plus side would be the declarations of the oft maligned Greg Mankiw to the effect that the “outsourcing” of jobs is beneficial to the United States economy (even with the qualification ‘perhaps’ this has merit – since despite the fact that the suggestion may not be as well-founded as Mankiw imagines, it is at least courageous in a situation where the President he is advising doesn’t appear any too clear on the question himself). Among the more evident examples of the low points would be the statement from the Democratic Presidential aspirant John Kerry to the effect that company leaders who promote business process outsourcing are ‘Benedict Arnold CEO’s’.
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Globalise or Die?

I don’t know if he had Europe specifically in mind, but this is the message from Singapore’s finance minister Lee Kuan Yew in this interview in the latest issue of Yale Global Online. As he puts it:”If you’re not driven by profit, and do what the communists used to, which means price equals cost plus, then your economy will collapse.” Is this message being heard here in the EU? If the comments my posts on Indian outsourcing are anything to go by, it isn’t. And if the results of the survey mentioned in my last post are well founded, the consequences of this neglect may not be long in making themselves felt. To give a measure of where we may be on this one, France currently has China at number 16 on its list of trading partners, behind Peru. Turning your back on global supply chains won’t save your job, it will only completely finish it off.
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Europe’s Jobless Recovery?

News in today might suggest that far from obsessing ourselves with the current plight of the US economy, our attention might be better directed rather nearer home. Reading off from the results of the latest Purchasing Managers Index survey which appears in todays Financial Times, the services sector is growing, but employemnt in it isn’t. Sound familiar? Now we’d better sit down and start examining the possible causes. Of course, it might be just a temporary blip (this is what they keep saying in the US, but it’s a blip that has been running some months now) and then again it might not be.
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Privatisation and Market Imperfection

Today I’m posting a link to my Singapore friend and colleague, Eddie Lee. The story behind this link is a strange one – almost surreal – and more or less directly related to my ‘friendster’ post last Saturday. I met Eddie back in February while I was Googling the net looking for some material to blog. I was looking for something on the Italian economy, and I found a link to an article in Singapore’s Straits Times, which, apart from touching on Italy, seemed also to talk about my favourite topic – ageing – to boot. Now I have the unfortunate habit of scan-reading a lot of material quickly, and as I scanned I found an argument I really liked. I’m going to post this I thought to myself.
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