I have been studying economics and I find myself interpreting the news differently. On May 17, 2010 the Wall Street Journal ran an article, "Manufacturing Capacity Going" by Justin Lahart. When I read that the U.S. manufacturing capacity has dropped almost 3 times a much as in the last recession, I now understand that means the GDP (Gross Domestic Product) will probably drop. That means the ratio of U.S. debt to GDP will increase, making the U.S. debt worse.
The June 22, 2010 WSJ article, "Onshore Energy Attracts Asian Funds" by Dinny McMahon and Se Young Lee pointed out that many foreign investors are poring money into U.S. energy companies like Chesapeake Energy and Atlas Energy.
Since I now have a better understanding of trade imbalances, I know that foreign countries with U.S. dollars are looking for investments in America. I noticed that the investments in energy companies will not lead to the creation of jobs like investments in factories would.
Lack of investment in factories and jobs will worsen the GDP because production will continue to decline. This is why the recovery will be a job-less recovery.
If we cannot understand the problems facing America, we cannot fix those problems. We all need a better understanding of economics.
Robert Canright
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