Discussion of Global Economics
Globalization is the process in which investment and financial markets are able to operate international due to the improved communication and deregulation in the recent years (McGeehan, 2011). Globalization may be perceived as positive or negative process. Without putting people’s perception on it, globalization is still an issue of debate. Despite the increase in international trade, the state of New York has lost the ability to reap more of the benefits of globalization, especially in the year 2011. This paper seeks to address the effects of globalization in New York economy, the variability of the economy and the effects of Hurricane Sandy.
There have been efforts to cut down the costs by many firms in New York; this has made the firms outsource their manufacturing labor to the less developed countries since the cost of labor is low. This has resulted to the resentment on the New York citizens’ part. To add on this, most Americans do not enjoy the customer service they are exposed to, creating animosity among them, adding up to the attitude the people already have to the outsourcing. The state has been losing more manufacturing jobs than big states like Michigan. Manufacturing has decreased, leaving fewer options for New York’s high population. The issue has also triggered debate among politicians, with the presidential debates creating a platform for deliberation.
Criminal and terrorists’ activities may have been helped by globalization. It brought the idea of allowing people and their luggage to freely travel across countries and borders. The September 11 attacks on the New York’s Twin Towers are still fresh in people’s mind. The deaths and lose of properties cost the state a lot. The economy of New York was brought down because of the tragedy. Groups with evil intentions used the opportunity brought by globalization to cause havoc.
Nevertheless, globalization has resulted in environmental degradation in New York. The need for raw materials to run the manufacturing companies has depleted the natural reserves. Pollution has negatively influenced the quality of air, which is vital for survival.
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Despite being the largest economy in the world, New York and the U.S.A in general have a variable economy. There have been reckless short-term changes in the policy. The massive deficits may temporarily increase spending, including, at the same time, the risk of reduction in the value of currency, inability of the government to pay debts and citizens losing confidence in the government agencies (World Bank, 1997). It is my opinion that deficit should be allowed, especially in recession, but should maintained at minimal level.
The government has also been reducing tax for some tax groups in the recent years. The available tax revenue is already low to meet the government expenditure on the health, education and infrastructure. In addition to this, inflation, deflation and financial crisis in Europe have added up to the factors that cause the US economy to be variable. There are many business dealings with the European countries; hence the financial crisis indirectly affects the country.
Hurricane sandy is one of the adverse disasters that rocked New York and the USA as a country. In anticipation of the hurricane, all schools, offices, restaurants and shopping malls were closed. Transport services, such as airlines flights, were suspended. The New York Stock Exchange was also closed down in anticipation of the weather changes. The storm was destructive and destroyed many properties and lots of lives were lost. There was an additional spending in settling the displaced families, and salvaging the few items left. The New York Marathon was also cancelled, which is also a major tourist attraction and source of revenue for New York City. To add on this, the closure of retail stores negatively influenced sales and, consequently, the stores’ profit.
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In conclusion, globalization, government policies and hurricane Sandy have made the economy of New York unstable. The government should undertake measures to eliminate the negative effects of globalization, which are inevitable to avoid. The New York disaster preparedness and management should also be put on check. There should be a constant review of the policies to adjust to the ever-changing global world (Petras, 2001).