Maybe this explains stubbornly high unemployment.
…Andy Xie has an interesting angle on why U.S. stimulus won’t work this time around, and we’ve decided to run with it.
Essentially, the world is too globalized today, whereby demand remains local but ’supply is global’.
In the past, when a government stimulated demand within a country, such as the U.S., this stimulated an investment expansion within the U.S.. Companies invested in domestic expansion in order to increase their product supply and meet stimulated American demand. This domestic investment expansion adds jobs, which sets off a cycle of economic expansion.
Yet in today’s globalized world, companies don’t need to expand within the U.S. in order to meet stimulated U.S. demand. They can expand their facilities in other countries, say China, in order to meet stimulated American demand. Thus American stimulus doesn’t create a sustainable cycle of economic expansion within the U.S. as it used to — it creates jobs in places like China rather!
Obviously it’s not quite so black and white. There will be…
Go here to see the original:
American Stimulus Creates Jobs In China Not America
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