Wednesday , May 25 2022

General Motors publishes huge layoffs and gives Trump industrial knowledge in an emergency


Voices warned about a possible recession in the US economy for 2019 or 2020 are still accruing. Analysts of Bloomberg, Forbes a The Wall Street Journal has warned, at least, that we will see an important apology. The sound warnings started at the end of the first quarter of the year, and for September 30 Bloomberg Sentenci: "Two-thirds of business economists in the US see a recession by the end of 2020."

General Motors, the largest maker in the United States, announced that he would dismiss 15% of workforce and plant closures in the United States and Canada. It's a cruel blow to the economic message of Trump, and a clear indication that the motorist has a negative analysis of the future of the economy. Larry Kudlow, chief economic adviser Trump, said today at the first press conference held in weeks of Ty Gwyn, the president felt that GM had "turned his back", after & # 39; Republicans approved last year's cut. Historical financial benefits of large corporations.

Potential recession indicators include the return curve of the Fed, which is short and long term. When an economy is healthy, long-term debt pays more than in the short term, that is, the above is in the graph. The gap between the two starts closing may be a negative indication, although this is not axiom, it is only a potential indicator of problems.

LPO consulted with Olugbenga Ajilore, Chief Economist of the Center for America Progress, one or more thinking tanks The most influential liberators in the United States Founded in 2003 by John Podesta, a powerful member of the Democratic Party serving as Chief Staff for Bill Clinton, presidential advisor of Obama, and president of the Hillary Clinton campaign in 2016.

How likely is the next year's recession?

I do not know if it is in 2019, but in 2020 it's really possible. There are many factors. Tariffs and the economy are very hard, interest rates, among others.

Yesterday, the second largest shipping ship in the United States, made a destructive announcement. Stop up many plants and cut 15% of your staff. Do you think GM is rushing? Do you think it is another sign of what will come to the economy in the near future? Respond to market changes?

The automotive market has changed a lot crossovers, SUVs and large trucks. Perhaps they are going on, but they are also very worried and try to predict the future of the economy, and if that does not mean plants and closing factories, that's what they will do.

How serious is what General Motors announced?

I want to emphasize, now that we are talking about General Motors, GM is one of the corporations that have been able to benefit from the tax cuts. People talk about how they're going to buy shares back [con el dinero del recorte], but no-one has shown concern to the employees. We are talking about 14 or 15 thousand people who are going to be unemployed, and as we already know, when the assembly closes their plants, the people in these cities suffer a lot to go back on their feet. We will have many people suffering and trying to get up, we need to focus on them and identify what we can do for the people who lost their jobs. We can not remind them.

Do you think the Federal Government should intervene to help these people?

Definitely There are things they can do, transition programs to help people move to other jobs.

Do you think the approval of NAFTA 2.0 will play an important part in the evolution of the state of the economy?

It's hard to say that it will have an effect, because there are no major changes. They call it 2.0 Shutter, but in fact it has small changes to the edge. In addition, it will not happen during the period lame ducks [periodo que va desde la eleccin del pasado 6 de noviembre a la entrada del Congreso en enero de 2019], and now the Democrats will take the Assembly. They will try to transfer more changes [al acuerdo comercial], things like environmental defenses, not only here, but also in Mexico. They will try to weigh for stronger labor laws. If he's waiting as it is, it will not have a lot of impact because he does not have many changes, but I doubt it can happen as it is.

What measures could Trump take to avoid or reduce the impact of the recession?

First they need to focus on the workers. Employees have had a very low wage growth. The administration has not focused on them or people with lower income. Even if they are solely focused on financial policy, they can make many changes to the benefit of low income workers. Expand deductibles, for examples. Republicans have talked about increasing tax-consumable expenses, but we have not seen them work on that. That's just an example of what they can do.

What about wages?

Salaries can play an important role. For example, if you see the federal minimum wage is $ 7.25 [dlares por hora], and they have not been charged since 2009. There is a great deal of money to be up to $ 15 dollars or $ 12 dollars, and you can argue how much to get up, but the fact that it is still $ 7.25 … It's very low.

Which number that seems reasonable to you?

$ 10 dollars or more. If you're thinking of matching it with inflation, it will be at that level. They can raise it to $ 15 dollars by 2024 gradually. The thing is that it's very low, and you can not trust that the states will raise it. At present only half of the states have a lower wage over the federal. It's not fair for the employees.

You can not address a specific policy of the Trump administration and say "this led to the recession", but many of the things that they did do not help the growth of the economy. Noting the biggest financial cut for companies in 40 years helps to grow.

Do you think the Trump administration is responsible for a possible recession that some experts predict?

It's hard to say. There is a lot of tax policy that does not make me sense, unless you focus exclusively on people with higher income. But it's hard to blame a specific administration. You can not sign a public policy and say "led to a recession", there are many factors that are outside the hands of the administration.

But many of the things that they did do not help the growth of the economy. I mean, giving the biggest tax cut we have seen in 40 years for the benefit of companies boost growth. And that's the only policy that this administration has to do. Public policies to increase labor productivity, raise salaries, help consumers, we have not seen any of that. Now, if a recession is coming, it will be difficult to blame on the administration, but they have not helped anything with the public policies promoted during the past and a half year.

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