The role of Bush tax cuts in the deficit

(CBS News) In a debate on "Face the Nation" today about the need for a deficit reduction agreement, Sen. Bill Nelson, D-Fla., argued that the present problem with the federal deficit was created by an imbalance between a drop in taxes collected and a rise in spending, and said that tackling both must be a part of any agreement. "How did we get into this problem of the big deficit?" Nelson said. "It's basically a fall-off of revenues and an increase in spending. So you got to correct that imbalance; otherwise you're not doing real deficit reduction." In debating the tax revenue part of the equation with fellow guest Sen. Jeff Sessions, R-Ala., Nelson said, "Jeffrey, you have to acknowledge that part of our deficit problem was the huge Bush tax cuts in the early part of the decade. What was handed off to the new administration of over a trillion dollars of annual deficit, that accounted for almost half of it. If you're going to be real about the numbers, you're going to have to address these kinds of things." "That's not accurate, Bill," Sessions responded. "The revenue went up every single year after those tax cuts were put in. The revenue is down now because of the low economy ... It's not because taxes have been cut in recent years. It's because people are not making money. They're not paying as much taxes. So increasing taxes on that weakened economy is not the way to increase revenue. " Sessions: Dem tax demands killing debt deal A review of data from the White House Office of Management and Budget shows that tax revenues did not consistently increase after the Bush tax cuts went into effect. In FY 2001, tax revenue in dollars was $1,991.1 billion. For FY 2002 - the first budget of the Bush administration, which went into effect after President George W. Bush signed tax cuts into law in June 2001 - revenue dropped to $1,853.1 billion. Bush signed two more tax cuts into law over the next two years. In FY 2003, revenue dropped further, to $1,782.3 billion - about a 10-percent reduction from two years earlier. This drop in tax revenue occurred even as economic activity - the nation's GDP - was continually rising, according to Bureau of Economic Analysis data. Revenues then increased for four years - from $1,880.1 billion in FY 2004 to $2,568 billion in FY 2007 - before sliding to $2,524 billion in FY 2008, and then dropping further to $2,105 billion in FY 2009 as the recession exploded. Source Data: White House Office of Management and Budget - Historical Tables As a percentage of gross domestic product, the amount of tax revenues as a part of the economy has also varied widely, though it is still less today than in FY2001, when it represented 19.5% of GDP. It has dipped from as low as 16.1% in FY2004, to as high as 18.5% in FY2007, before finishing out FY 2009 at 14.9% - its lowest level since 1950 (14.4%). It is true when Sen. Sessions said spending has increased every year from FY2001 - the last year the government spent less than it took in. In FY2001 spending was $1,862.8 billion; by FY2009 spending was at $3,517.7 billion - more than $1.4 billion more than what was collected in taxes. Analysis by Citizens for Tax Justice claims that the Bush era tax cuts resulted in $1,918.9 billion in lower revenue from FY2001 through FY2009, and that the total cost if implementing the cuts (including interest payments on debt) was $2,141 billion. Source : http://www.cbsnews.com Souerce : © 2011 CBS Interactive Inc.. All Rights Reserved.

Capital markets

eFinancialCareers Australia Get in on the ground floor of the finance market. Capital markets divisions are where traded financial products are born. Working on the 'factory floor' of the financial markets, these... er... blue-collar bankers produce financial products for companies and institutions that want to raise money. The two main products are shares, traded on the equity capital markets (ECM), and bonds, traded on the debt capital markets (DCM). 1) Shares: also known as equities. If you own a share, you own a tiny 'share' of a company. Shareholders receive a proportion of the company’s profits in the form of dividends. If a share price rises, investors can sell the shares at a profit; if it falls, they can make a loss. 2) Bonds: a form of debt. Like equities, a company (or a government) sells bonds to investors to raise money. However, at some point in the future, the company promises to pay the bond holders back. Since bonds can also be sold on to other investors (in the bond markets), the bond holder who is eventually reimbursed is likely to be totally different to whoever bought the bond originally. Until the redemption date, anyone who owns a bond receives interest payments from the company as thanks for lending it their money. Because these interest payments take the form of a fixed-cash sum, bonds are known as fixed-income products. Similarly, the bond markets can be known as the fixed-income (FI) markets. As well as simple equities and bonds, capital markets divisions also issue more complex products, such as equity-linked products (bonds that can be converted into equities at a pre-arranged price) and derivatives. Fixed-income capital markets are a lot larger than equity capital markets. According to Thomson Financial research, the value of domestic bonds issued in Australia in 2006 was US$86.6bn, compared with US$49.37bn raised in equity. Trends ECM divisions and DCM divisions have traditionally been separate. Over the past few years, however, a trend has emerged for banks to combine them into one division. Morgan Stanley, Merrill Lynch, Lehman Brothers and Dresdner Kleinwort have all taken this approach. Both types of market grew in 2006: companies raised a record AU$11.9bn in the 2005-06 financial year in listing their shares for the first time on the Australian stock market, and the total value of listed companies rose 21% to more than AU$1.4 trillion. Bond issues rose 12.6% to US$87bn as companies took advantage of low interest rates and raised money through the debt markets. The 2006-07 year has started in a similar vein, with sustained IPO activity (initial public offering, when a company floats on the stock market for the first time) plus M&A and private equity buyouts dominating the markets. Antony Cohen, KPMG’s executive director corporate finance, says it still has a way to go: “Private equity upped the stakes in 2005-06, pushing up multiples. We expect this to continue as superannuation funds continue to pump funds through to them.” Cohen also believes that the global quest for cleaner energy will sustain the Australian stockmarket: “Alternative energy sources such as uranium will attract more focus and investment. As Australia possesses around a third of the world’s uranium reserves, we expect to see a good deal of investment in that sector.” Key players Takeovers, mergers and acquisitions, either by public or private equity, dominated the Australian market. UBS led the field of bookrunners for Australian equity, though Goldman Sachs and Deutsche Bank led in Asian markets. Australian bond markets were headed by Deutsche Bank and National Australia Bank. Roles and career paths If you work in a capital markets division, you could find yourself doing anything from originating (bringing in business), to structuring (assembling complex derivatives products) or syndicating (preparing for the sale of the finished products to investors). Origination specialists are usually senior capital markets bankers. It’s a job that involves a lot of travel: originators spend their time meeting clients in an effort to gain insight into their financing needs and persuade them to deliver up their business. By comparison, structurers are distinctly desk-bound. They spend their time creating esoteric financial products that suit a company’s financing needs, as communicated by the originators. It’s up to the people on the syndication desk to prepare the ground for the sale. They calculate the best price range for the product concerned, assess how many people will want to buy it, and make sure the correct documents are in place. Pay Capital markets bankers are usually paid similarly to mergers and acquistions corporate financiers, but with M&A activity surging ahead, capital markets pros are lagging slightly. Analysts can expect to start on a minimum of AU$65k (plus bonus). Pay is heavily loaded in favour of a performance-related bonus. After seven years working on a capital markets team, a DCM vice-president could expect a package in the AU$350 to AU$500k bracket. Directors and managing directors can earn substantially more, with pay for successful originators topping AU$2m. Depending on the health of the respective markets, either ECM or DCM can prove more lucrative than the other. Both draw high salaries in Australia at present because the bourse is powering ahead, but also because of the strength of the activity in leveraged finance (the highly geared debt component of private-equity-led transactions), says Patrick Everest, partner at recruiter Jon Michel. Skills DCM and ECM jobs are highly sought after. To get in, you’ll need a strong academic record plus a raft of other attributes. • Everest at Jon Michel says: ‘It doesn’t matter so much what degree you’ve got as whether you have a clear track record of success and achievement. We don’t expect graduates to know debt and equity markets but we do want to see evidence of their capacity to succeed.” • Emilie Everett, head of recruiting at UBS, says capital markets are not as client-driven as many aspects of investment banking. “It is more market-driven. Even in sales, you might start the day early but by five or six in the evening, the day’s over for you. It is good for a work-life balance. You need to be very numerate and understand the workings of the global markets, be quick to comprehend the significance of movements and quick to act on them, but you will not be at your desk for the long hours common in other divisions. It’s still exciting, and demanding, but you can have a life.” • Elizabeth Ong, head of graduate recruiting at Deutsche Bank, says: “We look for people who are going to be able within a very few years to generate a great deal of money in the markets, who will be able to lead a deal. We look for evidence of leadership standards, a range of people skills, general competencies and familiarity with particular industries and sectors.” Source : * © Copyright 2000-2011 eFinancialCareers Ltd. eFinancialCareers is a Dice Holdings, Inc. company. Dice Holdings, Inc. is a publicly traded company listed on the New York Stock Exchange (Ticker: DHX)

The Benefits of Saving

Ads by Google Cari hotel di Singapura? agoda.web.id/Singapore_Hotels Penawaran baru hotel Singapura. Pesanlah sekarang! Translator Jobs www.RealTranslatorJobs.com $10-$55/Hour. Found: 386 Jobs in your area. Hiring Now! Investment Opportunity www.EnigIn.net Run Your Own Energy Saving Business PLC Seeks International Partners Saving money is a problem for a lot of people, and in the U.S. today, personal savings are at record lows. If you want a comfortable future for your family, it is imperative that you learn to save. If you plan to save, you must first plan how you spend. Developing a monthly budget is key for ensuring you have money left for savings. Before You Start * Discuss your plan to save with the rest of your family and make sure they agree and understand the importance. If they recognize the purpose behind any sacrifices they must make, they are more likely to stick with the plan. * Calculate your savings for prior year. How much did you set aside, if any? * Make debt a priority. Use your tax refund, etc. to pay off expenses in order to pave the way for greater savings. Pay Yourself First When creating your budget, plan to pay yourself first. In other words, pay your bills and then pay your savings account - BEFORE you buy that new TV or take that weekend trip. Saving money now will ease financial strain when something big, like college or a new home, comes up in the future. Get Started It takes some effort to construct a family budge. There are many computer programs and other electronic aids to help you, and of course, you can always opt for the old faithful pen and paper. Find a good example of a budget worksheet online to give you a guideline to go by, but most of all, choose a plan that will be easy and efficient for use and compliments your needs. You will first need to consider your monthly income. You should calculate every penny that goes into your pocket. This information will help prevent you from spending more than you make. After you know your exact income, you should track your spending. Take at least a month to determine how your money disappears. Make a record of everything from bills to bowling in order to plan the most efficient budget. Organize your spending into categories to include both the things you need and must pay for, like your food and your mortgage, and also the things you enjoy but could live without if you had to, like a monthly manicure or eating out twice a week. Spend less = Save more After you've looked at your detailed spending list, you can determine whether your debt is greater than your means. If you don't make enough to cover you car and house payments, you may need some aggressive action. For most people however, the overspending comes with the 'incidentals' and the luxuries we've all grown accustomed to. Your incidental spending will be the easiest place to cut back and make room for saving. You can start by canceling magazine subscriptions and going out to eat less often. Rent movies instead of going to movies to avoid the snack bar pitfall. You can always pop popcorn at home. Dig Deep You may be able to reduce spending in other areas as well. You might want to consider more economical shopping and clipping coupons. Try carpooling more often to save on astronomical gas prices. Credit card debt may be a problem for you as well. You should have a 'pay off' goal and may want to consider shopping around for low balance transfer rates or cards with no annual fee. CardWeb has a great list of low rate cards (1-301-631-9100 / online at cardweb.com). Low introductory rates that skyrocket after six months are a common pitfall. If you switch to a low rate card, make sure it's for the duration of the balance. Consider a home equity loan for a tax deduction, or look into a consolidation loan. Be certain you can make the monthly payments before going this route. Banks have the power to foreclose on a home equity loan in 90 days if you have miss your payments. If you're struggling with debt and it's thwarting your effort so to save, the National Federation for Credit Counseling (call 1-800-388-2227, or visit nfcc.org) can help you set a budget and organize payments with creditors for a small fee. Once you start to pay off debt, you can use the extra money to build savings. More and More As you 'get on a roll' with your budget, you will start finding room for more savings and anticipated needs. You may even be able to set money aside for these anticipated needs. You will still need to pay yourself first, but you may also begin to set money aside for that new car or the boat you've always wanted. If you set a savings goals for the long and short-term, you will likely save more. Studies indicate that people who have goals, tend to fair better in the long run. You will have to manipulate your budget as your circumstances change. Don't allow your plan to become stagnant and end up back where you started. Stay on top of the budget to stay on top of the savings. Summary · A budget can be organized on the computer or plain old pencil and paper. · Analyze your spending for one month. Do you spend more than you make? · Try and always keep track of daily spending. · To free up cash for savings, start by spending less on 'incidentals', then work your way up. · Pay down debt. · Set aside money from each paycheck for saving. Ask your bank about payroll saving and look into your company's retirement savings plan. · Stay on top of your budget and update it as often as necessary. What better time than right now to explore and learn more on the subject of no annual fee credit card offers. Learn from our years of experience, visit debtjerk.com. Article Source: http://EzineArticles.com/?expert=Darren_Cason EzineArticles.com © 2011 EzineArticles.com All Rights Reserved Worldwide *

http://www.investopedia.com/terms

Foreign Exchange Market What Does It Mean? What Does Foreign Exchange Market Mean? The market in which participants are able to buy, sell, exchange and speculate on currencies. Foreign exchange markets are made up of banks, commercial companies, central banks, investment management firms, hedge funds, and retail forex brokers and investors. The forex market is considered to be the largest financial market in the world. Watch: Forex Market Basics Click here for Investopedia FXtrader Investopedia Says Investopedia explains Foreign Exchange Market Because the currency markets are large and liquid, they are believed to be the most efficient financial markets. It is important to realize that the foreign exchange market is not a single exchange, but is constructed of a global network of computers that connects participants from all parts of the world. Filed Under: Acronyms, Forex, Forex, Hedge Funds Related Terms * Authorized Forex Dealer * Base Currency * Cable * Currency Pair * Daily Cut-Off * Foreign Exchange * Forex - FX * Forex Futures * Interbank Market * Quote Currency * More Related Terms Related Links * Top 7 Questions About Currency Trading Answered - Whether you're puzzled by pips or curious about carry trades, your queries are answered here. * A Primer On The Forex Market - Moving from equities to currencies requires you to adjust how you interpret quotes, margin, spreads and rollovers. * Getting Started In Forex - Before entering this market, you should define what you need from your broker and from your strategy. * Getting Started In Forex Options - Stocks are not the only securities underlying options. Learn how to use FOREX options for profit and hedging. * Trade Forex With FXTrader - Open up the big bad world of forex trading by virtually trading 10 of the most popular currency pairs on our NEW forex trading simulator. * Getting Started in Foreign Exchange Futures - Learn how these futures are used for hedging and speculating, and how they are different from traditional futures. * Commodity Prices And Currency Movements - Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading. * Explosive Gains In Forex – Learn what makes the currency markets move with your exclusive free report! * FXCM - Learn to Trade Currency with Free Demo * Get a risk-free $50,000 practice trading account at FOREX.com – Advanced trading platform with real-time quotes, charts, news, research. * Free Introductory Forex Trading Guide from GFT - Everything a beginner needs to know before entering the exciting & fast-paced forex market – from how to choose a dealer to how to place an order. Read more: http://www.investopedia.com/terms/forex/f/foreign-exchange-markets.asp#ixzz1bm1urXFL Source : Copyright © 2011 Investopedia ULC.

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Japanese Industrialization and Economic Growth Posted Mon, 2010-02-01 18:21 by Anonymous Carl Mosk, University of Victoria Japan achieved sustained growth in per capita income between the 1880s and 1970 through industrialization. Moving along an income growth trajectory through expansion of manufacturing is hardly unique. Indeed Western Europe, Canada, Australia and the United States all attained high levels of income per capita by shifting from agrarian-based production to manufacturing and technologically sophisticated service sector activity. Still, there are four distinctive features of Japan's development through industrialization that merit discussion: The proto-industrial base Japan's agricultural productivity was high enough to sustain substantial craft (proto-industrial) production in both rural and urban areas of the country prior to industrialization. Investment-led growth Domestic investment in industry and infrastructure was the driving force behind growth in Japanese output. Both private and public sectors invested in infrastructure, national and local governments serving as coordinating agents for infrastructure build-up. * Investment in manufacturing capacity was largely left to the private sector. * Rising domestic savings made increasing capital accumulation possible. * Japanese growth was investment-led, not export-led. Total factor productivity growth -- achieving more output per unit of input -- was rapid. On the supply side, total factor productivity growth was extremely important. Scale economies -- the reduction in per unit costs due to increased levels of output -- contributed to total factor productivity growth. Scale economies existed due to geographic concentration, to growth of the national economy, and to growth in the output of individual companies. In addition, companies moved down the "learning curve," reducing unit costs as their cumulative output rose and demand for their product soared. The social capacity for importing and adapting foreign technology improved and this contributed to total factor productivity growth: * At the household level, investing in education of children improved social capability. * At the firm level, creating internalized labor markets that bound firms to workers and workers to firms, thereby giving workers a strong incentive to flexibly adapt to new technology, improved social capability. * At the government level, industrial policy that reduced the cost to private firms of securing foreign technology enhanced social capacity. Shifting out of low-productivity agriculture into high productivity manufacturing, mining, and construction contributed to total factor productivity growth. Dualism Sharply segmented labor and capital markets emerged in Japan after the 1910s. The capital intensive sector enjoying high ratios of capital to labor paid relatively high wages, and the labor intensive sector paid relatively low wages. Dualism contributed to income inequality and therefore to domestic social unrest. After 1945 a series of public policy reforms addressed inequality and erased much of the social bitterness around dualism that ravaged Japan prior to World War II. The remainder of this article will expand on a number of the themes mentioned above. The appendix reviews quantitative evidence concerning these points. The conclusion of the article lists references that provide a wealth of detailed evidence supporting the points above, which this article can only begin to explore. The Legacy of Autarky and the Proto-Industrial Economy: Achievements of Tokugawa Japan (1600-1868) Why Japan? Given the relatively poor record of countries outside the European cultural area -- few achieving the kind of "catch-up" growth Japan managed between 1880 and 1970 - the question naturally arises: why Japan? After all, when the United States forcibly "opened Japan" in the 1850s and Japan was forced to cede extra-territorial rights to a number of Western nations as had China earlier in the 1840s, many Westerners and Japanese alike thought Japan's prospects seemed dim indeed. Tokugawa achievements: urbanization, road networks, rice cultivation, craft production In answering this question, Mosk (2001), Minami (1994) and Ohkawa and Rosovsky (1973) emphasize the achievements of Tokugawa Japan (1600-1868) during a long period of "closed country" autarky between the mid-seventeenth century and the 1850s: a high level of urbanization; well developed road networks; the channeling of river water flow with embankments and the extensive elaboration of irrigation ditches that supported and encouraged the refinement of rice cultivation based upon improving seed varieties, fertilizers and planting methods especially in the Southwest with its relatively long growing season; the development of proto-industrial (craft) production by merchant houses in the major cities like Osaka and Edo (now called Tokyo) and its diffusion to rural areas after 1700; and the promotion of education and population control among both the military elite (the samurai) and the well-to-do peasantry in the eighteenth and early nineteenth centuries. Tokugawa political economy: daimyo and shogun These developments were inseparable from the political economy of Japan. The system of confederation government introduced at the end of the fifteenth century placed certain powers in the hands of feudal warlords, daimyo, and certain powers in the hands of the shogun, the most powerful of the warlords. Each daimyo -- and the shogun -- was assigned a geographic region, a domain, being given taxation authority over the peasants residing in the villages of the domain. Intercourse with foreign powers was monopolized by the shogun, thereby preventing daimyo from cementing alliances with other countries in an effort to overthrow the central government. The samurai military retainers of the daimyo were forced to abandon rice farming and reside in the castle town headquarters of their daimyo overlord. In exchange, samurai received rice stipends from the rice taxes collected from the villages of their domain. By removing samurai from the countryside -- by demilitarizing rural areas -- conflicts over local water rights were largely made a thing of the past. As a result irrigation ditches were extended throughout the valleys, and riverbanks were shored up with stone embankments, facilitating transport and preventing flooding. The sustained growth of proto-industrialization in urban Japan, and its widespread diffusion to villages after 1700 was also inseparable from the productivity growth in paddy rice production and the growing of industrial crops like tea, fruit, mulberry plant growing (that sustained the raising of silk cocoons) and cotton. Indeed, Smith (1988) has given pride of place to these "domestic sources" of Japan's future industrial success. Readiness to emulate the West As a result of these domestic advances, Japan was well positioned to take up the Western challenge. It harnessed its infrastructure, its high level of literacy, and its proto-industrial distribution networks to the task of emulating Western organizational forms and Western techniques in energy production, first and foremost enlisting inorganic energy sources like coal and the other fossil fuels to generate steam power. Having intensively developed the organic economy depending upon natural energy flows like wind, water and fire, Japanese were quite prepared to master inorganic production after the Black Ships of the Americans forced Japan to jettison its long-standing autarky. From Balanced to Dualistic Growth, 1887-1938: Infrastructure and Manufacturing Expand Fukoku Kyohei After the Tokugawa government collapsed in 1868, a new Meiji government committed to the twin policies of fukoku kyohei (wealthy country/strong military) took up the challenge of renegotiating its treaties with the Western powers. It created infrastructure that facilitated industrialization. It built a modern navy and army that could keep the Western powers at bay and establish a protective buffer zone in North East Asia that eventually formed the basis for a burgeoning Japanese empire in Asia and the Pacific. Central government reforms in education, finance and transportation Jettisoning the confederation style government of the Tokugawa era, the new leaders of the new Meiji government fashioned a unitary state with powerful ministries consolidating authority in the capital, Tokyo. The freshly minted Ministry of Education promoted compulsory primary schooling for the masses and elite university education aimed at deepening engineering and scientific knowledge. The Ministry of Finance created the Bank of Japan in 1882, laying the foundations for a private banking system backed up a lender of last resort. The government began building a steam railroad trunk line girding the four major islands, encouraging private companies to participate in the project. In particular, the national government committed itself to constructing a Tokaido line connecting the Tokyo/Yokohama region to the Osaka/Kobe conurbation along the Pacific coastline of the main island of Honshu, and to creating deepwater harbors at Yokohama and Kobe that could accommodate deep-hulled steamships. Not surprisingly, the merchants in Osaka, the merchant capital of Tokugawa Japan, already well versed in proto-industrial production, turned to harnessing steam and coal, investing heavily in integrated spinning and weaving steam-driven textile mills during the 1880s. Diffusion of best-practice agriculture At the same time, the abolition of the three hundred or so feudal fiefs that were the backbone of confederation style-Tokugawa rule and their consolidation into politically weak prefectures, under a strong national government that virtually monopolized taxation authority, gave a strong push to the diffusion of best practice agricultural technique. The nationwide diffusion of seed varieties developed in the Southwest fiefs of Tokugawa Japan spearheaded a substantial improvement in agricultural productivity especially in the Northeast. Simultaneously, expansion of agriculture using traditional Japanese technology agriculture and manufacturing using imported Western technology resulted. Balanced growth Growth at the close of the nineteenth century was balanced in the sense that traditional and modern technology using sectors grew at roughly equal rates, and labor -- especially young girls recruited out of farm households to labor in the steam using textile mills -- flowed back and forth between rural and urban Japan at wages that were roughly equal in industrial and agricultural pursuits. Geographic economies of scale in the Tokaido belt Concentration of industrial production first in Osaka and subsequently throughout the Tokaido belt fostered powerful geographic scale economies (the ability to reduce per unit costs as output levels increase), reducing the costs of securing energy, raw materials and access to global markets for enterprises located in the great harbor metropolises stretching from the massive Osaka/Kobe complex northward to the teeming Tokyo/Yokohama conurbation. Between 1904 and 1911, electrification mainly due to the proliferation of intercity electrical railroads created economies of scale in the nascent industrial belt facing outward onto the Pacific. The consolidation of two huge hydroelectric power grids during the 1920s -- one servicing Tokyo/Yokohama, the other Osaka and Kobe -- further solidified the comparative advantage of the Tokaido industrial belt in factory production. Finally, the widening and paving during the 1920s of roads that could handle buses and trucks was also pioneered by the great metropolises of the Tokaido, which further bolstered their relative advantage in per capita infrastructure. Organizational economies of scale -- zaibatsu In addition to geographic scale economies, organizational scale economies also became increasingly important in the late nineteenth centuries. The formation of the zaibatsu ("financial cliques"), which gradually evolved into diversified industrial combines tied together through central holding companies, is a case in point. By the 1910s these had evolved into highly diversified combines, binding together enterprises in banking and insurance, trading companies, mining concerns, textiles, iron and steel plants, and machinery manufactures. By channeling profits from older industries into new lines of activity like electrical machinery manufacturing, the zaibatsu form of organization generated scale economies in finance, trade and manufacturing, drastically reducing information-gathering and transactions costs. By attracting relatively scare managerial and entrepreneurial talent, the zaibatsu format economized on human resources. Electrification The push into electrical machinery production during the 1920s had a revolutionary impact on manufacturing. Effective exploitation of steam power required the use of large central steam engines simultaneously driving a large number of machines -- power looms and mules in a spinning/weaving plant for instance - throughout a factory. Small enterprises did not mechanize in the steam era. But with electrification the "unit drive" system of mechanization spread. Each machine could be powered up independently of one another. Mechanization spread rapidly to the smallest factory. Emergence of the dualistic economy With the drive into heavy industries -- chemicals, iron and steel, machinery -- the demand for skilled labor that would flexibly respond to rapid changes in technique soared. Large firms in these industries began offering premium wages and guarantees of employment in good times and bad as a way of motivating and holding onto valuable workers. A dualistic economy emerged during the 1910s. Small firms, light industry and agriculture offered relatively low wages. Large enterprises in the heavy industries offered much more favorable remuneration, extending paternalistic benefits like company housing and company welfare programs to their "internal labor markets." As a result a widening gulf opened up between the great metropolitan centers of the Tokaido and rural Japan. Income per head was far higher in the great industrial centers than in the hinterland. Clashing urban/rural and landlord/tenant interests The economic strains of emergent dualism were amplified by the slowing down of technological progress in the agricultural sector, which had exhaustively reaped the benefits due to regional diffusion from the Southwest to the Northeast of best practice Tokugawa rice cultivation. Landlords -- around 45% of the cultivable rice paddy land in Japan was held in some form of tenancy at the beginning of the twentieth century -- who had played a crucial role in promoting the diffusion of traditional best practice techniques now lost interest in rural affairs and turned their attention to industrial activities. Tenants also found their interests disregarded by the national authorities in Tokyo, who were increasingly focused on supplying cheap foodstuffs to the burgeoning industrial belt by promoting agricultural production within the empire that it was assembling through military victories. Japan secured Taiwan from China in 1895, and formally brought Korea under its imperial rule in 1910 upon the heels of its successful war against Russia in 1904-05. Tenant unions reacted to this callous disrespect of their needs through violence. Landlord/tenant disputes broke out in the early 1920s, and continued to plague Japan politically throughout the 1930s, calls for land reform and bureaucratic proposals for reform being rejected by a Diet (Japan's legislature) politically dominated by landlords. Japan's military expansion Japan's thrust to imperial expansion was inflamed by the growing instability of the geopolitical and international trade regime of the later 1920s and early 1930s. The relative decline of the United Kingdom as an economic power doomed a gold standard regime tied to the British pound. The United States was becoming a potential contender to the United Kingdom as the backer of a gold standard regime but its long history of high tariffs and isolationism deterred it from taking over leadership in promoting global trade openness. Germany and the Soviet Union were increasingly becoming industrial and military giants on the Eurasian land mass committed to ideologies hostile to the liberal democracy championed by the United Kingdom and the United States. It was against this international backdrop that Japan began aggressively staking out its claim to being the dominant military power in East Asia and the Pacific, thereby bringing it into conflict with the United States and the United Kingdom in the Asian and Pacific theaters after the world slipped into global warfare in 1939. Reform and Reconstruction in a New International Economic Order, Japan after World War II Postwar occupation: economic and institutional restructuring Surrendering to the United States and its allies in 1945, Japan's economy and infrastructure was revamped under the S.C.A.P (Supreme Commander of the Allied Powers) Occupation lasting through 1951. As Nakamura (1995) points out, a variety of Occupation-sponsored reforms transformed the institutional environment conditioning economic performance in Japan. The major zaibatsu were liquidated by the Holding Company Liquidation Commission set up under the Occupation (they were revamped as keiretsu corporate groups mainly tied together through cross-shareholding of stock in the aftermath of the Occupation); land reform wiped out landlordism and gave a strong push to agricultural productivity through mechanization of rice cultivation; and collective bargaining, largely illegal under the Peace Preservation Act that was used to suppress union organizing during the interwar period, was given the imprimatur of constitutional legality. Finally, education was opened up, partly through making middle school compulsory, partly through the creation of national universities in each of Japan's forty-six prefectures. Improvement in the social capability for economic growth In short, from a domestic point of view, the social capability for importing and adapting foreign technology was improved with the reforms in education and the fillip to competition given by the dissolution of the zaibatsu. Resolving tension between rural and urban Japan through land reform and the establishment of a rice price support program -- that guaranteed farmers incomes comparable to blue collar industrial workers -- also contributed to the social capacity to absorb foreign technology by suppressing the political divisions between metropolitan and hinterland Japan that plagued the nation during the interwar years. Japan and the postwar international order The revamped international economic order contributed to the social capability of importing and adapting foreign technology. The instability of the 1920s and 1930s was replaced with replaced with a relatively predictable bipolar world in which the United States and the Soviet Union opposed each other in both geopolitical and ideological arenas. The United States became an architect of multilateral architecture designed to encourage trade through its sponsorship of the United Nations, the World Bank, the International Monetary Fund and the General Agreement on Tariffs and Trade (the predecessor to the World Trade Organization). Under the logic of building military alliances to contain Eurasian Communism, the United States brought Japan under its "nuclear umbrella" with a bilateral security treaty. American companies were encouraged to license technology to Japanese companies in the new international environment. Japan redirected its trade away from the areas that had been incorporated into the Japanese Empire before 1945, and towards the huge and expanding American market. Miracle Growth: Soaring Domestic Investment and Export Growth, 1953-1970 Its infrastructure revitalized through the Occupation period reforms, its capacity to import and export enhanced by the new international economic order, and its access to American technology bolstered through its security pact with the United States, Japan experienced the dramatic "Miracle Growth" between 1953 and the early 1970s whose sources have been cogently analyzed by Denison and Chung (1976). Especially striking in the Miracle Growth period was the remarkable increase in the rate of domestic fixed capital formation, the rise in the investment proportion being matched by a rising savings rate whose secular increase -- especially that of private household savings - has been well documented and analyzed by Horioka (1991). While Japan continued to close the gap in income per capita between itself and the United States after the early 1970s, most scholars believe that large Japanese manufacturing enterprises had by and large become internationally competitive by the early 1970s. In this sense it can be said that Japan had completed its nine decade long convergence to international competitiveness through industrialization by the early 1970s. MITI There is little doubt that the social capacity to import and adapt foreign technology was vastly improved in the aftermath of the Pacific War. Creating social consensus with Land Reform and agricultural subsidies reduced political divisiveness, extending compulsory education and breaking up the zaibatsu had a positive impact. Fashioning the Ministry of International Trade and Industry (M.I.T.I.) that took responsibility for overseeing industrial policy is also viewed as facilitating Japan's social capability. There is no doubt that M.I.T.I. drove down the cost of securing foreign technology. By intervening between Japanese firms and foreign companies, it acted as a single buyer of technology, playing off competing American and European enterprises in order to reduce the royalties Japanese concerns had to pay on technology licenses. By keeping domestic patent periods short, M.I.T.I. encouraged rapid diffusion of technology. And in some cases -- the experience of International Business Machines (I.B.M.), enjoying a virtual monopoly in global mainframe computer markets during the 1950s and early 1960s, is a classical case -- M.I.T.I. made it a condition of entry into the Japanese market (through the creation of a subsidiary Japan I.B.M. in the case of I.B.M.) that foreign companies share many of their technological secrets with potential Japanese competitors. How important industrial policy was for Miracle Growth remains controversial, however. The view of Johnson (1982), who hails industrial policy as a pillar of the Japanese Development State (government promoting economic growth through state policies) has been criticized and revised by subsequent scholars. The book by Uriu (1996) is a case in point. Internal labor markets, just-in-time inventory and quality control circles Furthering the internalization of labor markets -- the premium wages and long-term employment guarantees largely restricted to white collar workers were extended to blue collar workers with the legalization of unions and collective bargaining after 1945 -- also raised the social capability of adapting foreign technology. Internalizing labor created a highly flexible labor force in post-1950 Japan. As a result, Japanese workers embraced many of the key ideas of Just-in-Time inventory control and Quality Control circles in assembly industries, learning how to do rapid machine setups as part and parcel of an effort to produce components "just-in-time" and without defect. Ironically, the concepts of just-in-time and quality control were originally developed in the United States, just-in-time methods being pioneered by supermarkets and quality control by efficiency experts like W. Edwards Deming. Yet it was in Japan that these concepts were relentlessly pursued to revolutionize assembly line industries during the 1950s and 1960s. Ultimate causes of the Japanese economic "miracle" Miracle Growth was the completion of a protracted historical process involving enhancing human capital, massive accumulation of physical capital including infrastructure and private manufacturing capacity, the importation and adaptation of foreign technology, and the creation of scale economies, which took decades and decades to realize. Dubbed a miracle, it is best seen as the reaping of a bountiful harvest whose seeds were painstakingly planted in the six decades between 1880 and 1938. In the course of the nine decades between the 1880s and 1970, Japan amassed and lost a sprawling empire, reorienting its trade and geopolitical stance through the twists and turns of history. While the ultimate sources of growth can be ferreted out through some form of statistical accounting, the specific way these sources were marshaled in practice is inseparable from the history of Japan itself and of the global environment within which it has realized its industrial destiny. Appendix: Sources of Growth Accounting and Quantitative Aspects of Japan's Modern Economic Development One of the attractions of studying Japan's post-1880 economic development is the abundance of quantitative data documenting Japan's growth. Estimates of Japanese income and output by sector, capital stock and labor force extend back to the 1880s, a period when Japanese income per capita was low. Consequently statistical probing of Japan's long-run growth from relative poverty to abundance is possible. The remainder of this appendix is devoted to introducing the reader to the vast literature on quantitative analysis of Japan's economic development from the 1880s until 1970, a nine decade period during which Japanese income per capita converged towards income per capita levels in Western Europe. As the reader will see, this discussion confirms the importance of factors discussed at the outset of this article. Our initial touchstone is the excellent "sources of growth" accounting analysis carried out by Denison and Chung (1976) on Japan's growth between 1953 and 1971. Attributing growth in national income in growth of inputs, the factors of production -- capital and labor -- and growth in output per unit of the two inputs combined (total factor productivity) along the following lines: G(Y) = { a G(K) + [1-a] G(L) } + G (A) where G(Y) is the (annual) growth of national output, g(K) is the growth rate of capital services, G(L) is the growth rate of labor services, a is capital's share in national income (the share of income accruing to owners of capital), and G(A) is the growth of total factor productivity, is a standard approach used to approximate the sources of growth of income. Using a variant of this type of decomposition that takes into account improvements in the quality of capital and labor, estimates of scale economies and adjustments for structural change (shifting labor out of agriculture helps explain why total factor productivity grows), Denison and Chung (1976) generate a useful set of estimates for Japan's Miracle Growth era. Operating with this "sources of growth" approach and proceeding under a variety of plausible assumptions, Denison and Chung (1976) estimate that of Japan's average annual real national income growth of 8.77 % over 1953-71, input growth accounted for 3.95% (accounting for 45% of total growth) and growth in output per unit of input contributed 4.82% (accounting for 55% of total growth). To be sure, the precise assumptions and techniques they use can be criticized. The precise numerical results they arrive at can be argued over. Still, their general point -- that Japan's growth was the result of improvements in the quality of factor inputs -- health and education for workers, for instance -- and improvements in the way these inputs are utilized in production -- due to technological and organizational change, reallocation of resources from agriculture to non-agriculture, and scale economies, is defensible. Notes: [a] Maddison (2000) provides estimates of real income that take into account the purchasing power of national currencies. [b] Ohkawa (1979) gives estimates for the "N" sector that is defined as manufacturing and mining (Ma) plus construction plus facilitating industry (transport, communications and utilities). It should be noted that the concept of an "N" sector is not standard in the field of economics. [c] The estimates of trade are obtained by adding merchandise imports to merchandise exports. Trade openness is estimated by taking the ratio of total (merchandise) trade to national output, the latter defined as Gross Domestic Product (G.D.P.). The trade figures include trade with Japan's empire (Korea, Taiwan, Manchuria, etc.); the income figures for Japan exclude income generated in the empire. [d] The Human Development Index is a composite variable formed by adding together indices for educational attainment, for health (using life expectancy that is inversely related to the level of the infant mortality rate, the IMR), and for real per capita income. For a detailed discussion of this index see United Nations Development Programme (2000). [e] Electrical generation is measured in million kilowatts generated and supplied. For 1970, the figures on NHK subscribers are for television subscribers. The symbol n.a. = not available. Sources: The figures in this table are taken from various pages and tables in Japan Statistical Association (1987), Maddison (2000), Minami (1994), and Ohkawa (1979). Flowing from this table are a number of points that bear lessons of the Denison and Chung (1976) decomposition. One cluster of points bears upon the timing of Japan's income per capita growth and the relationship of manufacturing expansion to income growth. Another highlights improvements in the quality of the labor input. Yet another points to the overriding importance of domestic investment in manufacturing and the lesser significance of trade demand. A fourth group suggests that infrastructure has been important to economic growth and industrial expansion in Japan, as exemplified by the figures on electricity generating capacity and the mass diffusion of communications in the form of radio and television broadcasting. Several parts of Table 1 point to industrialization, defined as an increase in the proportion of output (and labor force) attributable to manufacturing and mining, as the driving force in explaining Japan's income per capita growth. Notable in Panels A and B of the table is that the gap between Japanese and American income per capita closed most decisively during the 1910s, the 1930s, and the 1960s, precisely the periods when manufacturing expansion was the most vigorous. Equally noteworthy of the spurts of the 1910s, 1930s and the 1960s is the overriding importance of gross domestic fixed capital formation, that is investment, for growth in demand. By contrast, trade seems much less important to growth in demand during these critical decades, a point emphasized by both Minami (1994) and by Ohkawa and Rosovsky (1973). The notion that Japanese growth was "export led" during the nine decades between 1880 and 1970 when Japan caught up technologically with the leading Western nations is not defensible. Rather, domestic capital investment seems to be the driving force behind aggregate demand expansion. The periods of especially intense capital formation were also the periods when manufacturing production soared. Capital formation in manufacturing, or in infrastructure supporting manufacturing expansion, is the main agent pushing long-run income per capita growth. Why? As Ohkawa and Rosovsky (1973) argue, spurts in manufacturing capital formation were associated with the import and adaptation of foreign technology, especially from the United States These investment spurts were also associated with shifts of labor force out of agriculture and into manufacturing, construction and facilitating sectors where labor productivity was far higher than it was in labor-intensive farming centered around labor-intensive rice cultivation. The logic of productivity gain due to more efficient allocation of labor resources is apparent from the right hand column of Panel A in Table 1. Finally, Panel C of Table 1 suggests that infrastructure investment that facilitated health and educational attainment (combined public and private expenditure on sanitation, schools and research laboratories), and public/private investment in physical infrastructure including dams and hydroelectric power grids helped fuel the expansion of manufacturing by improving human capital and by reducing the costs of transportation, communications and energy supply faced by private factories. Mosk (2001) argues that investments in human-capital-enhancing (medicine, public health and education), financial (banking) and physical infrastructure (harbors, roads, power grids, railroads and communications) laid the groundwork for industrial expansions. Indeed, the "social capability for importing and adapting foreign technology" emphasized by Ohkawa and Rosovsky (1973) can be largely explained by an infrastructure-driven growth hypothesis like that given by Mosk (2001). In sum, Denison and Chung (1976) argue that a combination of input factor improvement and growth in output per combined factor inputs account for Japan's most rapid spurt of economic growth. Table 1 suggests that labor quality improved because health was enhanced and educational attainment increased; that investment in manufacturing was important not only because it increased capital stock itself but also because it reduced dependence on agriculture and went hand in glove with improvements in knowledge; and that the social capacity to absorb and adapt Western technology that fueled improvements in knowledge was associated with infrastructure investment. References Denison, Edward and William Chung. "Economic Growth and Its Sources." In Asia's Next Giant: How the Japanese Economy Works, edited by Hugh Patrick and Henry Rosovsky, 63-151. Washington, DC: Brookings Institution, 1976. Horioka, Charles Y. "Future Trends in Japan's Savings Rate and the Implications Thereof for Japan's External Imbalance." Japan and the World Economy 3 (1991): 307-330. Japan Statistical Association. Historical Statistics of Japan [Five Volumes]. Tokyo: Japan Statistical Association, 1987. Johnson, Chalmers. MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975. Stanford: Stanford University Press, 1982. Maddison, Angus. Monitoring the World Economy, 1820-1992. Paris: Organization for Economic Co-operation and Development, 2000. Minami, Ryoshin. Economic Development of Japan: A Quantitative Study. [Second edition]. Houndmills, Basingstoke, Hampshire: Macmillan Press, 1994. Mitchell, Brian. International Historical Statistics: Africa and Asia. New York: New York University Press, 1982. Mosk, Carl. Japanese Industrial History: Technology, Urbanization, and Economic Growth. Armonk, New York: M.E. Sharpe, 2001. Nakamura, Takafusa. The Postwar Japanese Economy: Its Development and Structure, 1937-1994. Tokyo: University of Tokyo Press, 1995. Ohkawa, Kazushi. "Production Structure." In Patterns of Japanese Economic Development: A Quantitative Appraisal, edited by Kazushi Ohkawa and Miyohei Shinohara with Larry Meissner, 34-58. New Haven: Yale University Press, 1979. Ohkawa, Kazushi and Henry Rosovsky. Japanese Economic Growth: Trend Acceleration in the Twentieth Century. Stanford, CA: Stanford University Press, 1973. Smith, Thomas. Native Sources of Japanese Industrialization, 1750-1920. Berkeley: University of California Press, 1988. Uriu, Robert. Troubled Industries: Confronting Economic Challenge in Japan. Ithaca: Cornell University Press, 1996. United Nations Development Programme. Human Development Report, 2000. New York: Oxford University Press, 2000. Citation: Mosk, Carl. "Japan, Industrialization and Economic Growth". EH.Net Encyclopedia, edited by Robert Whaples. January 18, 2004. URL http://eh.net/encyclopedia/article/mosk.japan.final * Encyclopedia: o Encyclopedia © EH.Net - Economic History Services

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creativity and innovation 123456789…next ›last » VIRTUAL PROJECT | Comment Virtual Project Management Tool Organizes Project Steps BY Clint GFri Jan 8, 2010 The virtual workspace is a project management tool that allows individuals, groups and business teams to connect and collaborate on projects digitally. Teams can plan projects, update project steps, organize events and create reports ...READ» PROJECT MANAGEMENT COMPANY | 1 comment Project Management Company Software Delivers Low-Stress Project Proposals BY Clint GThu Jan 7, 2010 Creating project proposals for a potential new client is a task that requires a considerable amount of knowledge to accurately estimate the timelines, resources and activities required to meet the goals of a finished project. 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Bardiju akrabkan kertas daur ulang lewat Internet Selasa, 11 Oktober 2011 23:24 WIB | 1250 Views Beberapa permintaan baik produk dan kerja sama sudah datang dari Kanada, Amerika dan Malaysia, tinggal ditindak lanjuti.Sementara itu, dari Jepang sudah terjadi kerja sama sejak tiga tahun lalu,” Marciel: Wirausahawan Pacu Pertumbuhan Indonesia Jakarta (ANTARA News) - Rumah di atas lahan seluas 700 meter persegi di kawasan Tomang, Jakarta Barat itu tampak lengang. Halaman depan setengahnya ditanami berbagai tanaman. Ada satu papan ukuran 50cm persegi terpampang bertuliskan "Bardiju; making paper and paper craft". Pemilik rumah muncul dan menyapa. Ambardi Nasution, si empunya rumah menyilakan tamunya ke halaman belakang. Ternyata di sana "dapur" usaha kertas daur ulang itu. Beberapa ember bubur kertas berwarna-warni mengisi teras belakang rumah. Tumpukan batang dan daun pisang yang sudah dicincang juga memenuhi beberapa drum bekas di pojok ruangan. Apa arti kata Bardiju? "Ambardi Juli," kata Ambardi. Juli adalah bulan kelahirannya. Di bulan Juli tahun 2006 juga dia memulai usaha daur ulang tersebut. Ide usaha itu berawal dari keprihatinannya ata kertas yang terbuang percuma dan kayu-kayu yang habis diekploitasi untuk pembuatan kertas. "Rasanya sayang melihat kertas-kertas koran dan kertas HVS yang terbuang sia-sia. Kertas itu dapat dijadikan banyak benda, saya bisa menumpahkan kreatifitas saya pada kertas. Hobi ini merupakan penunjang bisnis saya," ucap pria kelahiran Jakarta 1973 itu. Ambardi kemudian mendaur ulang kertas-kertas sisa dan dijadikan kertas baru yang tentu saja lebih menarik dan berharga jual cukup tinggi. Daya tarik kertas daur ulang terdapat pada tekstur unik dan penuh nilai seni sehingga lebih mahal dari kertas biasa. pelatihan Pria dari Universitas Islam Indonesia Yogyakarta tersebut memulai dengan belajar otodidak untuk proses pendauran kertas. Dia menambah pengetahuan dari membaca berbagai referensi serta mengikuti pelatihan daur ulang kertas. Ambardi memilih pohon pisang sebagai salah satu bahan baku kertas daur ulang. Alasannya, pohon pisang mudah ditemukan dan harganya terjangkau. "Saya fokus pada batang dan daun pisang, karena unik dan lebih berserat, jadi lebih elastis. Oleh sebab itu saya menanam banyak pohon pisang di kebun belakang," ujarnya kepada Antaranews.com. Bermodal tabungan pribadi dia memulai usaha itu dengan merekrut lima tenaga tetap dan beberapa tenaga harian. Awalnya, ia membuka toko kertas daur ulang di area perbelanjaan di kawasan Roxy Jakarta Barat bahkan sempat ke beberapa mall. Seiring berjalannya waktu, Ambardi memilih untuk menjalankan bisnisnya di rumah dan mengandalkan internet. “Mengikuti pameran itu sebenarnya capek, karena kita harus membuat stand, mencari orang untuk menjaga stand dan lain-lain. Sementara itu, pesanan produk Bardiju juga terus membanjir, jadi saya harus pintar-pintar memilih prioritas,” ujar Ambardi. Internet juga yang mendatangkan pesanan dari berbagai tempat termasuk luar negeri. “Beberapa permintaan baik produk dan kerja sama sudah datang dari Kanada, Amerika dan Malaysia, tinggal ditindak lanjuti.Sementara itu, dari Jepang sudah terjadi kerja sama sejak tiga tahun lalu,” ujar Ambardi. Dia mengaku tidak memiliki kendala berarti pada saat ini dalam mengembangkan usahanya. Bardiju yang memproduksi kertas daur ulang, kantong kertas, amplop, pigura foto, kotak penyimpanan bahkan surat undangan ini, juga menerima pelatihan atau kursus singkat bagi masyarakat bahkan anak sekolah. “Saya ingin mendidik masyarakat Indonesia agar bisa meningkatkan pemahaman dan kepedulian terhadap lingkungan, diharapkan dapat menjadi agen-agen aktif upaya pelestarian lingkungan dan pembangunan berkelanjutan, salah satunya dengan pembuatan produk daur ulang ini,” ujar Ambardi. “Teknik daur ulang kertas seringkali saya unggah di laman Bardiju, supaya dapat dipelajari masyarakat dengan mudah,” ujar Ambardi. Saat ini dia memiliki rencana untuk membuat kertas dari daun sirsak serta ekspor ke seluruh ASEAN. (SDP-02) Ikuti berita terkini di handphone anda di m.antaranews.com Sumber: * www.antaranews.com * Copyright © 2011