Obama on Economic Recovery

Congratulations. The US of America has voted and they have voted for Barrack Obama. US citizens have great hopes on him. And so does much people around the world is also expecting so much from him. This is also for us in Asia especially in Indonesia. What would be his steps to tackle this crisis? From his campaign it is quiet clear what he will do.

Let’s just make this simple. Roosevelt at his time had plans for the US to recover from the Great Depression. His plans while campaigning were also interesting and got the minds of voters. Obama is in some sort of the same situation now.

But the thing is .. Can Obama pull it off this time? What Roosevelt did was he created projects such as building the great Roosevelt Dam to absorb the unemployment because he thinks the enemy of an economic crisis is unemployment. This fiscal expansion policy is to regain the economic growth and is also known as a Keynesian economic approach.

Now what Obama wants to do is cut tax for the low income, increase them for the middle and rich. He also said he wants to create jobs by giving incentives to entrepreneurs. This is to increase the people’s demand of goods and service which can move the economy. Regulate the financial market, and take the troops from Iraq which will significantly lower the cost of war.

The current conditions when the US market has low demand of goods from exporting countries like China and Indonesia. And when they (US) stop demanding, what it means to us is lay offs and factories forced to close because of no order. And as we speak is happening now in Indonesia. HR departments and company owners are in a state of worry because they are faced with the cost of termination and other possible legal actions by workers. A local West Java newspaper also quoted that a total 70.000 lay offs are about the happen in the beginning of 2009, starting now.

That’s why recently the Indonesian government is finding ways so that these industries have the ability to survive a crisis by depending on the local market.

Can we call this an effect of globalization?

There is much hope that the US economy will recover again, and in Obama hands it the faith of the US Economy which we hope will also effect the world’s economy.