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Friday, December 30, 2011

Economy

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The economy has continued to slump, and it seemed there was no improvement in our near future. This is not only in the US, but in other countries as well. Being a global economy, profits and losses in one company can effect hiring and investment decisions in another, possibly half way around the world. The US consumer spending increased 6% in the last three months, and industrial production rose again in February.


Foreign investment is a large part of globalization. Many more companies are choosing to invest abroad to supply new companies locally. The IMF is reporting sales for the French companies doubled due to this foreign investment. Intel, Xerox, Hewlett Packard and Gateway are just a few of the companies who entered into Ireland to help the economy grow 10%. As soon as Gateway began suffering at home, they cut back globally, pulling 00 jobs out of hands in Ireland. Irish businesses that cater to the US quickly began to suffer. This is put by Christian Schmelter, a hotel manager in Ireland, “when they felt the pinch, we felt the pinch.”


Because we are such a highly globalized world, a poor economy in the US can easily result in a poor economy throughout many other parts of the world. If our economy falls, it is like a domino effect, resulting in the fall of many companies and ultimately economies around the world.


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