Monday, February 28, 2011

Russia Demonstrates Economic Common-Sense

Russia is providing an example for how sane societies conduct economic policy.    The funny part is, they are doing what America did in the 1980s, in response to the Japanese car invasion.  They are saying, if you want access to our market, you have to open up factories on our soil.  
Of course, China has been doing that for the last 20 years as well, so their economy is booming while ours continues to shrink. 
The iron rule of economics remains the same: production comes before consumption.  If you don't make something, you have nothing to trade.  It is common sense: productive jobs have to come first.    The basis of any sane economic policy has to be providing people with productive jobs. 
Here is the article about Russia:

MOSCOW (Reuters) – The world's biggest carmakers have until the end of Monday to sign up for Russia's latest scheme to entice major players and strengthen its local industry ahead of any future crisis.

Russia was on the verge of overtaking Germany to become Europe's biggest car market before the country's 2009 recession caused annual sales to collapse by half.

A sharp recovery in 2010 -- aided by a government sponsored scrappage scheme -- has revived industry optimism about future Russian growth and prompted state attempts to pin down foreign players to invest and support the domestic industry.

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