Gates:Technology will Revive US Economy

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Companies are, including Microsoft, hiring more foreigners and outsourcing more than ever before. Unitil that tide changes....there will be no gas to propel anything.....

 

I have said it in other posts, since we do not seem to level the playing field our way, we should play the same game, our major trading partners play.

The other part is, pumping out a lot of lawyers and politicians would not make technology better. We need engineers and entreprenuers - that part I agree with Bill Gates.

Blog: http://yupsonnnrd.blogspot.com/2006/03/why-engineering-enrollment-is-down.html

 

USA imports 20 million Barrels per day of Oil which is over $600 Billion per year. Why can not we spend say $60 Billion over 10 years to built the first commercial Fusion reactor?

 

Because he is not an engineer, he may have difficulty grasping the concept. So, he does what his other rich friends do. Monkey see monkey do....

 

It will, if we export the products out of the technology and create tons of jobs.

 

From the additional taxes because when jobs are created, people pay taxes. No jobs, few people pay fewer taxes rich or poor alike. Most taxes come from good paying jobs.

While theoretically that is true, practical matters, patents, styles, structures prevent such activities. Proprietory ideas are usually difficult to pick up. Think of Toyota cars built in America vs. General Motor cars OR Japanese stereos vs our inability to make stereos at the same price point even though we have the highest productivity.

People around the world are trying to copy Silicon Valley, Las Vegas, Disney, Hollywood etc. without much success - there is more to it than technology, they are People, Process and Information.

 

January 25, 2008
Throughout Asia, Exporters Brace for Tremors From a U.S. Pullback
By KEITH BRADSHER

HONG KONG — Asian exporters are already feeling the effects of an American economic downturn — effects that may be magnified by a weak dollar, volatile world markets and fears that more bad loans may be ticking in the coffers of American companies.

Rather than waiting for things to get worse, companies from Chinese garment businesses to Japanese equipment manufacturers are changing how they operate.

The weakening American demand is clear. American orders for small tractors fell 5 percent last year at the Kubota Corporation in Osaka and are expected to fall further this year. Orders from the United States have been weak for a year at Top Form, the Hong Kong company that is the world’s largest bra manufacturer. And at Aigret Industries, a manufacturer of multiline phone systems and fax machines in Xiamen, China, orders from the United States plunged 30 percent in the fourth quarter compared with a year ago.

In some Asian industries, the result has been deep gloom. At the Evergreen Knitting Company in Ningbo, China, orders from the United States for T-shirts and sweaters abruptly dropped 20 percent this winter. The company expects some rival Chinese knitwear producers to shut down altogether.

“We anticipate that this year, 10 to 20 percent of the knitwear factories will have to close due to the inability to compete,” said Sean Zhu, Evergreen’s sales manager.

In response to the downturn, some companies are pursuing remedies that will affect economic output, like Aigret Industries, which has lengthened next month’s Chinese New Year vacation for its workers to 20 days, instead of the usual 10.

Others are investing in more technological research and developing new models, like the Xigo Electric Company in Zhongshan, China, which manufactures air-conditioners and liquid-crystal display television sets.

“We really felt the impact of the slowdown in the U.S. during the second half of 2007,” said Stan He, a Xigo sales manager. “Orders were generally down by 10 to 20 percent relative to the same period a year ago.”

Asian exporters lie at the center of the debate in financial markets over the extent to which Asia has decoupled from the United States and can grow strongly even if the American economy slows significantly. The evidence so far is that the effects of an American slowdown will vary widely, depending on each country’s reliance on exports and the extent to which each country’s economy is currently overheating or stumbling.

China, which has struggled in recent months with rising inflation, has actually benefited from slower exports — although a steeper decline could prove a problem. The Chinese government announced on Thursday that growth eased to 11.2 percent in the fourth quarter, from 11.5 percent in the third quarter and 11.9 percent in the second quarter.

The modest slowing, almost entirely because of less brisk growth in exports, helped reduce inflation to 6.5 percent in December from 6.9 percent in November, the government said.

But with fixed-asset investment still soaring in China, Xie Fuzhan, the director of the National Bureau of Statistics, warned at a press conference in Beijing that China was still worried that overall growth was too fast to be sustained without inflationary pressures.

For countries that were already struggling with weak growth and faced little if any inflation, like Japan, weak exports are proving a serious setback.

“Now we see ‘re-coupling,’ ” said Tetsufumi Yamakawa, chief economist in Tokyo for Goldman Sachs. “The economy of Japan is proving disappointingly fragile to external shocks.”

China overtook Canada last year as the largest exporter to the United States. But year-over-year growth in Chinese exports to the United States slowed sharply last autumn, posting a gain of just 7 percent in November from a year earlier. That was only slightly greater than the appreciation of the Chinese currency against the dollar over the same period, suggesting that the actual volume of Chinese goods headed to the United States stagnated.

For Japan, Malaysia, Thailand, Australia, Bangladesh, Sri Lanka, Cambodia and Indonesia, exports to the United States actually dropped in dollar terms in November.

On Wednesday, Citigroup cut its average estimate for economic growth this year among Asian economies by four-tenths of a percent, while reducing its estimate for growth in the United States by seven-tenths of a percent, to 1.6 percent.

The question across Asia is how much worse can it get.

Willie Fung, the chairman of Top Form, said that American stores were not oversupplied with bras after the Christmas season.

“Apparently it is not going from bad to worse. I hardly notice any changes over the past couple months as far as demand is concerned,” he said.

A few exporters are even upbeat.

“I have not seen orders go down from the U.S. or from Europe,” said Alice Lam, a sales manager at the Shunde Growth Corporation, which assembles bookcases and other furniture in Shunde, in southeastern China, from imported Taiwanese steel.

But many exporters are worried. Kubota is trying to increase sales of larger tractors and expand market share in Thailand, China and Europe to offset small tractor weakness in America.

Fuji Heavy Industry, which makes Subaru cars, is also fretting. “Our concern about the future of the U.S. economy is becoming very strong, though our sales aren’t declining now,” said Shinichi Murata, a Fuji spokesman. He said Subaru may offer incentives, like price cuts or better terms on car financing deals.

China’s garment industry is particularly wary.

“Because of the subprime crisis in the U.S., the U.S. economy is not as big as in years before — a lot of Chinese textile companies are getting fewer and fewer orders from the U.S.,” said Cao Xinyu, the deputy director of the China Chamber of Commerce for the Import and Export of Textiles.

But executives at six different manufacturers said in separate telephone interviews this week that their biggest worries lay not in the United States but at home.

The Chinese government is imposing stricter labor laws and tighter environmental regulations while cracking down on corporate tax evasion and making it harder for companies to claim large rebates of the value added taxes that they pay.

Chinese officials have imposed export quotas on the number of garments shipped, forcing companies to make fewer but costlier products that compete with clothing from higher wage countries. “They really have stepped up their efforts,” Mr. Fung of Top Form said, “to attain what they want to see.”

Martin Fackler contributed reporting from Tokyo and David Barboza from Shanghai.

 

I do not think, the richer people pay that. When I was working for a company at a senior level (W2 and stocks) I was in the highest tax bracket. While that may be considered rich to some, I considered me to be upper middle class. When I started my own business, the tax rate dropped because I can expense a lot of it that I otherwise could not.

My point is, the real rich that accumulate millions in assets find a way to defer the taxes for a long time. The upper middle class pay the most taxes.