Still with no clue…

Yesterday June 20^th, President Obama released a statement declaring that the United States was committed to an Open Investment Policy. The statement basically calls for more “Inbound Foreign Direct Investment” which explains the benefits of foreign-based companies investing in the US.

This is a policy adopted by the administration to generate incentives for foreign companies to grow and expand their businesses in US territory. These companies are helping to expand the US economy by creating new jobs, building new facilities, and investing in innovation. These firms tend to generate higher paying jobs with better benefits than domestic companies according to a 2008 employee compensation report.

The US has always been and still is the country with the highest foreign investment in the world. In 2010 the inbound foreign direct investment increased by almost 50% compared to the lowest point during the last crisis. This increase is particularly important to the manufacturing sector as is the one that benefited the most after the huge layoffs and bankruptcy of big firms like the automotive companies in Detroit.

Yesterday’s statement proposes ideas to accelerate the private sector job growth, and the key piece in this strategy is foreign direct investment. The Executive Office of the President Council of Economic Advisers claims that the US must achieve this if they are to compete for the best jobs and develop the industries of the future.

This may as well be a wild claim as the US domestic industry has been on the downfall for almost a decade. To go as far as claiming that foreign companies are needed is to lose all faith in what the US entrepreneur has to offer and this is with no doubt a mistake. Instead of bringing outsiders to fix problems that were caused by poor policy making, the current administration should focus on fixing the screw-up’s of the past and enforce civilized and modern practices from the domestic firms. This will in return boost benefits and the economy as a whole, as well as build a stronger trust of the American people in their own system.

All remains to be seen…

The United States of America faced the most predictable economic crisis in its young but dense history. A crisis that came from irresponsible fiscal plans that included the deregulation of the financial system. This year it would be the third anniversary of the latest economic crisis and its true that jobs have been created and the crisis seems to be improving, but has it been completely averted?

The answer to this question is quite simple, just look at the latest fiscal plan released by the President’s Commission. This plan demands shared sacrifice and it has managed to obtain bipartisanship majority which actually proves to be an effective measure, but only on paper.

The truth is that at least where America is concerned, experience shows that this will not be enough and such a plan will not work without sustained pressure from the business community. Experience also shows that due to drastic deregulation in a short period of time, businesses in America have claimed complete independence from the system and don’t actually care much about it nor about society as a whole. This deregulation measures have lead to a division of power that well overweight’s that of the executive, legislative, and the judiciary power division.

Companies now a days hold the US government in there hands therefore the fiscal plan should include them in the separation of duties if they really want to have shared sacrifice or actual benefits. It would be completely impossible to reduce the economic deficit by 4 trillion $US over the next decade without private or international support. Especially when it is claimed that cuts will be done on domestic spending habits, social security, health care, tax earmarks, and defense. The one thing every one can be sure of is that the last one will be the one with less deductions in its spending when clearly it should be the one suffering the most in budget cuts out of the five largest drivers of federal the federal budget.

Hopefully something useful can come out of this report apart from proving that bipartisan majority can be attained. The lack of good reasonable judgment from the current administration atleast in terms of federal spending seems to be overwhelming, but one thing we can count on, is:

“You can always count on Americans to do the right thing- after they’ve done everything else” -Winston Churchill-