Globalization is doomed! This might be your first thought after reading the headlines of this article’s title, but it is not exactly what it seems. Lawrence Summers of the Washington Post, points out that there really is no impending doom or even evidence of a potential recession on the horizon. This article is more of a call to action for the incoming President of the United States. The future president of the most powerful nation in the world will have to play a primary role in getting the global economy jump-started again and creative policies on globalization will be critical in arriving at the intended destination. This time, it’s going to require more than just a few tax breaks and trade policies for the high rolling companies of
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Summers (2016), mentioned in the article, “there is no crisis at hand for the global marketplace, it just seems that hesitant consumers have decided to put more money into their savings accounts rather than living life to the fullest while things are good.” The International Monetary Fund (IMF), which the textbook explains was established to maintain order in the international monetary system, shared their most recent growth forecast which had to be updated to correct an overly optimistic opinion on the global economy. According to Summers (2016), there is a growing awareness that the lagging growth is not the result of some type of major flare up in the global community, but the structural changes and challenges that are hurting middle class development. Past policies and agreements on international trade have been spearheaded by and developed for the elite few. The major multi-national corporations have for many years been the main beneficiaries of these efforts. Other firms can also join in the fun if they meet the criteria, but few treaties are being drafted with the small players in …show more content…
More cooperation between banks, governments, and the “small guys” is absolutely necessary to breaking through the bounds of lacking infrastructure. Private sector investment made available to companies that are expanding and realizing the benefits of a boundary-less marketplace will kick the economy into high gear, but the globalization of production could do more for the world as a whole by positively shifting consumer demand. As smaller companies engage in international trade, or as the book calls them “Mini Multi-Nationals”, they should also be given the opportunity to engage in international production without retaliatory import/export taxes from their own country or any other country they may choose to do business in. As more businesses evaluate the benefits of moving production to international locations, the price of labor will begin to move its way up the supply curve creating a more stable economy. A minimum wage of $6/hour in one country versus $3/hour in another gives obvious benefit to a manufacturer, but as companies shift their operations, the wages will eventually start to reach an equilibrium between the two locations thus stabilizing the global economy. This may lead to diminishing growth in a country like the United States where labor wages are already high, but only a minor change in income for a more heavily populated nation with low labor wages could result in huge economic
Summers (2016), mentioned in the article, “there is no crisis at hand for the global marketplace, it just seems that hesitant consumers have decided to put more money into their savings accounts rather than living life to the fullest while things are good.” The International Monetary Fund (IMF), which the textbook explains was established to maintain order in the international monetary system, shared their most recent growth forecast which had to be updated to correct an overly optimistic opinion on the global economy. According to Summers (2016), there is a growing awareness that the lagging growth is not the result of some type of major flare up in the global community, but the structural changes and challenges that are hurting middle class development. Past policies and agreements on international trade have been spearheaded by and developed for the elite few. The major multi-national corporations have for many years been the main beneficiaries of these efforts. Other firms can also join in the fun if they meet the criteria, but few treaties are being drafted with the small players in …show more content…
More cooperation between banks, governments, and the “small guys” is absolutely necessary to breaking through the bounds of lacking infrastructure. Private sector investment made available to companies that are expanding and realizing the benefits of a boundary-less marketplace will kick the economy into high gear, but the globalization of production could do more for the world as a whole by positively shifting consumer demand. As smaller companies engage in international trade, or as the book calls them “Mini Multi-Nationals”, they should also be given the opportunity to engage in international production without retaliatory import/export taxes from their own country or any other country they may choose to do business in. As more businesses evaluate the benefits of moving production to international locations, the price of labor will begin to move its way up the supply curve creating a more stable economy. A minimum wage of $6/hour in one country versus $3/hour in another gives obvious benefit to a manufacturer, but as companies shift their operations, the wages will eventually start to reach an equilibrium between the two locations thus stabilizing the global economy. This may lead to diminishing growth in a country like the United States where labor wages are already high, but only a minor change in income for a more heavily populated nation with low labor wages could result in huge economic