RENO, NEVADA – It’s true, Gregory Bunn said, that a lot of economists are worried that the European debt crisis could eventually prove to be a huge drag on the American economy, making a full U.S. recovery take even longer.
“They’re going through their troubles,” Bunn said of the European nations. “It’s like we’re both playing chicken in a car, and they’re ahead of us, and the dangers they face will be the dangers we face.”
At the same time, though, “It may not be the same outcomes,” he added.
The global economy has made a lot of Americans nervous, particularly those who blame the lingering high unemployment on once-profitable jobs that were lost here in the states, and got shipped overseas to countries where salaries are a pittance compared to here. Bunn has heard those complaints as well.
“When the economy comes back, many of those jobs still go to low wage countries – and it’s not just low skill jobs,” he said. “Some of the things we’ve excelled at have gone overseas.”
At the same time, Bunn thinks globalization, in the long run, will help make this nation’s economy much stronger, and give Americans rising incomes and a higher standard of living. And that, he said, is because of the proven tendency of Americans to do one thing, non-stop: spend.
“Here in the United States, we’re a good supplier for (business) capital, but we’re number one in the world for consumption,” he said. “We’re the big consumers.”
And that, he said, helps bring the economies of other nations into greater positions of strength and wealth – which then opens up new markets for U.S. goods and services as well.
“A lot of countries, especially those poorest countries, have embraced globalization because it means more economic power,” he said.
Bunn, who lives in Daytona Beach, has more than 18 years of procurement and supply chain experience at such firms as Sony, IBM, and Convergys. A recognized authority on procurement and supply logistics, he’s contributed articles to The Financial Times and Purchasing Magazine, among other publications. On Thursday, he gave a presentation on Globalization and what it means for the U.S. economy, during the 2012 Annual Gathering of American Mensa, held at the Silver Legacy Hotel in Reno, Nevada.
“I’m not a stock broker,” he said. “I’m not an analyst. But everything you hear here is the truth as far as I know it.”
And what he knows, Bunn said, is that globalization is not necessarily going to be bad for the U.S. economy. More likely, he said, it will prove to be the exact opposite.
What it means in the future, he said, is an established a process of “socializing loss and risk-sharing.” In other words, the nations of the world band together to ensure that one country doesn’t collapse under the weight of its own economic problems – as Europe is doing today to bail out the governments in Greece and Spain, to ensure that their potential economic collapse doesn’t spread to the rest of the continent and then overseas.
Globalization, Bunn said, is “the coming together on thoughts and economies and cultures to move toward one economy. What is globalization? It’s the process of international integration.”
And this process is speeding up, he said, with advances in technology and mass communications.
Today there are four aspects of globalization, he said – international trade and business transactions, capital and investments between nations, the migration of people from one nation to another, and the dissemination of knowledge and technology. All of these trends are leading to what he called a “one world government.”
And while technology is accelerating this process, it isn’t new, he added. It can be traced back to the end of the Second World War, when President Harry Truman and Congress adopted The Marshall Plan. Also known as the European Recovery Program or ERP, it was a large-scale effort to aid Europe to help rebuild European economies and to prevent the spread of Soviet communism. The plan stayed in operation for four years, starting in April 1948.
“Certainly we’ve always had trade agreements, but the start of globalization had to be the Marshall Plan at the end of World War II,” Bunn said. “At the start of the Cold War, we were concerned that communism would spread across Europe, so we provided aid to them.”
That started the process of uniting the interests of the U.S. and Europe, including economically, Bunn said.
“Whatever you feel about globalization, there are a lot of benefits to it,” he said.
For one thing, investment by U.S. businesses in poor nations helps build up their economy. That creates a market for American producers to target in the future, Bunn said.
“Because of those jobs being created, new businesses will pop up there,” he said. “In the long run, we should be providing more goods and services that they will someday be able to afford.”
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