Globalization and Recession

"There's a dangerous tendency to resort to protectionism when things get tough. In 1929, American tariffs turned a domestic financial crisis into a global economic crisis that inflicted damage for years to come."

States Mr. Jeff Immelt, chairman and CEO of General Electric in an excellent article "Time to Re-Embrace Globalization" here in The Economist's, The World in 2009. Mr. Immelt lays down six "Points of Principle" in the article that drive the debate within GE. Summarily, they are:

• A strong international trade system is fundamental
• Continued economic liberalization enhances growth
• Protectionism must be resisted
• Global trade must be fair
• Governments must pursue domestic policies that allow their citizens to thrive in the global economy
• Each of us must contribute

It may seem that the above is apropos for the current USA administration, yet an article from The Mises Institute provides an interesting look at the previous USA administration here from 2003.

Mr. Immelt ends by stating - "True leaders must re-embrace globalization".

Manufacturing Renaissance

In The Economist's, The World in 2009, Sir John Rose, Chief Executive of Rolls Royce writes:

"... manufacturing brings huge benefits. It penetrates the economy of the whole country... It pays well... stop treating manufacturing as a relic of the industrial revolution.High value-added but avoids bewildering distortions of income. It drives and enables a broad range of skills and stimulates the growth of services. In short, it creates wealth."

Even though Sir Rose speaks specifically to the British economy, yet his excellent article "Made in Britain" here applies to all the developed countries with lessons for the developing ones.

It is also interesting to note that Sir Rose specifically calls out the nuclear industry as ripe of breakthrough stating specific to Britain:

"If we can become a nuclear "first mover" we will develop our nuclear capability and supply chain, enabling us to benefit from a growing global market."