GET THE FACTS BEHIND THE NEWS A recent study by the Information Technology and Innovatioon Foundation, a nonpartisan reserch group,showed that the US economy's competitive position has rapidly declined the last 10 years
The report covered 40 countries and used 16 indcators to judge innovation and competitiveness. The report adjusted for the size of the economy and population of coutries The report ranked the US 6th for innovation and competitiveness. The report considered such areas as scientific researchers and spending on research, venture capital investment, and educational achievment. The report placed the American Economy last in advancement for the last 10 years
This report paralles the finding Of Prof. Michael Porter of Harvard a noted expert in competitiveness and very active in the OECD. The OECD, Organization for Economic Cooperation and Development, an international non-gov’t and non-profit group dedicated to furthering growth and competitiveness completed Nov 08, 2009 a study of 144 nations for eleven categories from Institutions to Business Sophistication
Thirdly the National Academies considered the nation's leadiing science advisory group by many has also found that the US lead in science and technology was declining while other nations were advancing. China, Finland, Singapore, and Taiwan have policies that are designed to spur innovation thru an inerdisciplanary approach that includes abroad spectrum of different fields.
President Obama has said that future prosperity will depend on the United States becoming an “innovation economy.” The economic recovery package includes spending for areas favored by innovation policy advocates. Areas such as higher research and development spending. and funds for high-technology fields like electronic health records. However the US does not have a coordinated innovation program.
Many see these studies as a awake up call.
More results, the United States ranked sixth in venture capital investment (Sweden was first); fifth in corporate research and development spending (Japan led); and fourth in science and technology researchers (again, Sweden was first). Singapore ws the most innovative and competitive. Singapore started a national innovation strategy years ago. Singapore investing heavily and recruited leading scientists and technologists from around the world.
The study specifically recommendeds federal incentives for American companies to innovate at home, these range from research tax incentives to work force development tax credits. Public investments and regulatory incentives can accelerate the use of information technology in health care, energy systems, transportation, government and education.
Showing posts with label What is the US Economic Position I. Show all posts
Showing posts with label What is the US Economic Position I. Show all posts
Thursday, October 15, 2009
Wednesday, April 8, 2009
TO FIX OUR MORTGAGE SYSTEM
Get the facts behind the news
Our current mortgage system has broken down in large part because of a structural defect that should be corrected to help our economy avoid similar problems in the future.
At the present time mortgage originators do not retain any part of the credit risk. Therefore they are motivated to maximize their fee income by closing as many mortgages as possible. Once the mortgage is sold it is usually without recourse. The originator if
unscrupulous has no interest in the welfare of the mortgagor than
to close the sale and get the commission. The interest of the
mortgagor is not identical to the interests of the property owner. Even
if the originator has credit risk originators who wrote sub prime and no
down payment mortgages have very little capital. Probably some
form of insurance would have to be written to cover this credit risk.
There are mortgage systems where the originator is either responsible
or shares the credit risk. One of these is the Danish system. In the Danish systemrvice companies retains the credit risk. Theyhave to replace the mortgages that are in default. In contrast to our reliance on government sponsored enterprises (GSEs)—namely Fannie Mae and Freddie Mac.
The Danish is an open system in which all mortgage participate on equal terms and it operates without government guarantees. Yet Danish mortgage bonds are traditionally very highly rated; often they yield less than government bonds.Their distinguishing feature is that they are identical to and interchangeable with the underlying mortgages. House owners can redeem their mortgages at any time by purchasing the equivalent mortgage bond in the market and xchanging it for the mortgage. Since bond prices and house prices normally move in the same direction, this feature--called the principle of balance--reduces the chances of householders having negative equity in their houses.
The mortgage originators are strictly regulated, and their interests are closely aligned with those of the bondholders. They pass on only the interest rate risk to bondholders, retaining the credit risk. That is why the bonds are so highly rated.
When Mexico wanted to securitize mortgages in order to promote house ownership, it opted, for the Danish system.
Our current mortgage system has broken down in large part because of a structural defect that should be corrected to help our economy avoid similar problems in the future.
At the present time mortgage originators do not retain any part of the credit risk. Therefore they are motivated to maximize their fee income by closing as many mortgages as possible. Once the mortgage is sold it is usually without recourse. The originator if
unscrupulous has no interest in the welfare of the mortgagor than
to close the sale and get the commission. The interest of the
mortgagor is not identical to the interests of the property owner. Even
if the originator has credit risk originators who wrote sub prime and no
down payment mortgages have very little capital. Probably some
form of insurance would have to be written to cover this credit risk.
There are mortgage systems where the originator is either responsible
or shares the credit risk. One of these is the Danish system. In the Danish systemrvice companies retains the credit risk. Theyhave to replace the mortgages that are in default. In contrast to our reliance on government sponsored enterprises (GSEs)—namely Fannie Mae and Freddie Mac.
The Danish is an open system in which all mortgage participate on equal terms and it operates without government guarantees. Yet Danish mortgage bonds are traditionally very highly rated; often they yield less than government bonds.Their distinguishing feature is that they are identical to and interchangeable with the underlying mortgages. House owners can redeem their mortgages at any time by purchasing the equivalent mortgage bond in the market and xchanging it for the mortgage. Since bond prices and house prices normally move in the same direction, this feature--called the principle of balance--reduces the chances of householders having negative equity in their houses.
The mortgage originators are strictly regulated, and their interests are closely aligned with those of the bondholders. They pass on only the interest rate risk to bondholders, retaining the credit risk. That is why the bonds are so highly rated.
When Mexico wanted to securitize mortgages in order to promote house ownership, it opted, for the Danish system.
Wednesday, April 1, 2009
HOW DOES THE US ECONOMY RATE TODAY?
GET THE FACTS BEHIND THE NEWS
In judging measures to help our economy we should look at the effect on the “forest” and not get completely lost in the woods. The OECD, Organization for Economic Cooperation and Development an international non-gov’t and non-profit group dedicated to furthering growth and competitiveness completed Nov 08 a study of 144 nations for eleven categories from Institutions to Business Sophistication.
Over all the US ranked first. However many will be shocked to see how low the US economy is rated on several important economic categories.
For instance US workers want to be paid high wages. High wages are usually paid to highly skilled well educated workers with good experience. This is one of the reasons Prof Michael Porter (Harvard School of Business) and others including Pres Obrama believes our educational system must be upgraded. Data from OECD reports show the US IS 12TH out of 144 nations IN THE NO. OF COLLEGE GRADS 25 TO 34. We have not made any progress in this vital area in 30 years. We have to compete with the best skilled workers of other countries and regions of the world. It is in our national interest to make it possible for intelligent people who desire to do so can get an education and become skilled people,
Fallowing are some figures from the Global Competitive Report
2008-2009.as to where the US rates as a free market economy.
US
Out of 144 countries
1) Openness to Capital Flows 20
2) Low Trade Barriers 21
3) Absence of Distortion from 35
Taxes and Subsidiaries
We will continue to examine in greater detail where the US ranks on several important t categories.
In judging measures to help our economy we should look at the effect on the “forest” and not get completely lost in the woods. The OECD, Organization for Economic Cooperation and Development an international non-gov’t and non-profit group dedicated to furthering growth and competitiveness completed Nov 08 a study of 144 nations for eleven categories from Institutions to Business Sophistication.
Over all the US ranked first. However many will be shocked to see how low the US economy is rated on several important economic categories.
For instance US workers want to be paid high wages. High wages are usually paid to highly skilled well educated workers with good experience. This is one of the reasons Prof Michael Porter (Harvard School of Business) and others including Pres Obrama believes our educational system must be upgraded. Data from OECD reports show the US IS 12TH out of 144 nations IN THE NO. OF COLLEGE GRADS 25 TO 34. We have not made any progress in this vital area in 30 years. We have to compete with the best skilled workers of other countries and regions of the world. It is in our national interest to make it possible for intelligent people who desire to do so can get an education and become skilled people,
Fallowing are some figures from the Global Competitive Report
2008-2009.as to where the US rates as a free market economy.
US
Out of 144 countries
1) Openness to Capital Flows 20
2) Low Trade Barriers 21
3) Absence of Distortion from 35
Taxes and Subsidiaries
We will continue to examine in greater detail where the US ranks on several important t categories.
Friday, March 20, 2009
What is the US Economic Position? I
Is what has driven our economic success starting to erode?
GET THE FACTS BEHIND THE NEWS
While our immediate goal is to halt the present economic recession, we must be careful to be sure that the measures that are taken will lay a foundation for economic growth and prosperity.
Diogenes believes most people do not realize how far our economy slipped in relation to the other nations and economies we compete with. Noted Harvard School of Business Professor Michael Porter believes” a series of policy failures have offset and even nullified “US “ strengths just as other nations are becoming more competitive”.
1) “An inadequate rate of reinvestment in science and technology is hampering our feeder system for entrepreneurship. Research and development as a share of the GDP has declined, while it has risen in other countries”. This is well recognized but policy makers have failed to act.
2) Our belief in competition is waning. “A creeping relaxation of antitrust enforcement has allowed mergers to dominate markets”. “We are seeing more interference in competition with protectionism and favoritism.”
3) US colleges and universities do not have a serious plan, such as GI Bill or National Science Foundation programs, to improve access to them. The US now ranks 12th in educational attainment for 25 to 34year olds. For 30 yrs we have not improved ourselves in this area. This is an “ominous trend in an economy that must have the skills to justify our high wages.”
4) At a time when job insecurity and turnover are high the US gov’t has not taken responsibility to provide a transition safety net for US working people. The job training system is ineffective and receives less funding each year. Pension security is declining. Social security is not being adjusted and strengthened. Access to affordable health insurance is a major worry to most people. The gov’t could equalize the tax deductibility of individuals purchasing insurance to assist those not covered by their employers, but has failed to do so.
5) The US is energy inefficient. Public policies fail to promote energy conservation.
6) “Trade and foreign investment are fundamental to the success of the US economy but the US has lost its focus and credibility in shaping the international trading system.” “With no strategy the US has failed to work with other advanced countries to assist poorer countries to feel confident about opening markets and internal reform.” “Our foreign aid is still tied to the purchase of US goods rather than the actual needs of countries.”
7) “The federal gov’t has failed to recognize and support the decentralization and regional specialization that drives our economy.
8) Lack of regulatory oversight combined with lack of a strategic plan has resulted in a hodge-podge of policies that have driven up the costs of doing business. TO SUM UP WE HAVE HAD POOR ECONOMIC MANAGEMENT.
9) Is good strategic economic plan possible considering our political system?
It requires political parties and private leaders to come together and chart a long term plan. Prof Porter recommends a bipartisan joint planning group to coordinate priorities,
Does the new Stimulus Bill help solve these problems?
GET THE FACTS BEHIND THE NEWS
While our immediate goal is to halt the present economic recession, we must be careful to be sure that the measures that are taken will lay a foundation for economic growth and prosperity.
Diogenes believes most people do not realize how far our economy slipped in relation to the other nations and economies we compete with. Noted Harvard School of Business Professor Michael Porter believes” a series of policy failures have offset and even nullified “US “ strengths just as other nations are becoming more competitive”.
1) “An inadequate rate of reinvestment in science and technology is hampering our feeder system for entrepreneurship. Research and development as a share of the GDP has declined, while it has risen in other countries”. This is well recognized but policy makers have failed to act.
2) Our belief in competition is waning. “A creeping relaxation of antitrust enforcement has allowed mergers to dominate markets”. “We are seeing more interference in competition with protectionism and favoritism.”
3) US colleges and universities do not have a serious plan, such as GI Bill or National Science Foundation programs, to improve access to them. The US now ranks 12th in educational attainment for 25 to 34year olds. For 30 yrs we have not improved ourselves in this area. This is an “ominous trend in an economy that must have the skills to justify our high wages.”
4) At a time when job insecurity and turnover are high the US gov’t has not taken responsibility to provide a transition safety net for US working people. The job training system is ineffective and receives less funding each year. Pension security is declining. Social security is not being adjusted and strengthened. Access to affordable health insurance is a major worry to most people. The gov’t could equalize the tax deductibility of individuals purchasing insurance to assist those not covered by their employers, but has failed to do so.
5) The US is energy inefficient. Public policies fail to promote energy conservation.
6) “Trade and foreign investment are fundamental to the success of the US economy but the US has lost its focus and credibility in shaping the international trading system.” “With no strategy the US has failed to work with other advanced countries to assist poorer countries to feel confident about opening markets and internal reform.” “Our foreign aid is still tied to the purchase of US goods rather than the actual needs of countries.”
7) “The federal gov’t has failed to recognize and support the decentralization and regional specialization that drives our economy.
8) Lack of regulatory oversight combined with lack of a strategic plan has resulted in a hodge-podge of policies that have driven up the costs of doing business. TO SUM UP WE HAVE HAD POOR ECONOMIC MANAGEMENT.
9) Is good strategic economic plan possible considering our political system?
It requires political parties and private leaders to come together and chart a long term plan. Prof Porter recommends a bipartisan joint planning group to coordinate priorities,
Does the new Stimulus Bill help solve these problems?
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