Investor Worries: Energy Prices, Dollar Value, Jobs Outsourcing

[SOS2008]

I wasn't sure if this should be posted in Economics under Social Sciences, however in reading this, I wondered what PF members think regarding these economic issues:

What are investors' top worries in early 2005? Is the declining value of the dollar gaining prominence on investors' radar screens? How about increasing interest rates?

Energy Prices Are the Top Investor Worry
Energy prices top the list of investor worries, with 87% saying the price of gas and oil is hurting the investment climate. More than half of investors (56%) say energy prices are hurting the investment climate "a lot" and another 31% say they are hurting it "a little." Investors have reflected this same high level of concern about energy prices throughout the past year.

The Value of the Dollar Is Worrying More Investors
Nearly two in three investors (63%) say the value of the dollar is hurting the investment climate "a lot" (27%) or "a little" (36%). This is up 10 percentage points from a year ago, when about half (53%) of all investors had similar concerns. Apprehension over the value of the dollar has increased more than investor concern about any of the other eight areas surveyed both this year and a year ago.

Other Investor Worries
Tied for second among investor worries -- behind energy prices -- is the outsourcing of jobs to foreign countries and the federal budget deficit, with 79% of investors saying each of these is hurting the investment climate. Next on the list of investor concerns are questionable accounting practices (77%), followed by the current situation in Iraq (69%), illegal immigration and the threat of more terrorist attacks (both at 65%), and the value of the dollar (63%). The three issues about which investors show the least concern are general economic conditions (52%), the cost of housing (48%), and the current level of interest rates (33%).

As in the past, high energy prices will reduce the disposable incomes of consumers this year, while increasing interest rates will raise the cost of borrowing. Given the combined effects of these two trends, it is hard to see how consumer spending in 2005 can continue at last year's pace. In sum, investors have good reason to be concerned about the continuation of high energy prices this year, as do their consumer counterparts.

More stats to follow later...

 

[PerennialII]

I put a vote for the "gap between rich and poor", and even though may receive "banter" for it (I do believe in its existence ... don't strike me with the black and white option of what is in the other end ) and it's not as current or quarterly problem as many of the other options, from this batch I do see it as a systemic problem (why rating it above else), which when as drifted as nowadays impacts and leads to a large number of other societal problems.

 

[russ_watters]

Interesing to see a vote for unemployment being a "problem". How 'bout some stas on that...

http://nidataplus.com/lfeus1.htm#annl

 

[Pengwuino]

I voted for inflation just to confuse people

 

[Nereid]

SOS, I assume by 'this country' you mean 'the USA'?

 

[gravenewworld]

I would have to go with the budget deficit. Inflation, investment, trade deficit, and currency value are all affected by it. Deficits run up from "supply side" economic tax cuts also cause the gap between the rich and the poor to grow larger. Although investment makes up about 1/10 of the total GDP for the economy, investment is the major cause of economic cycles since it is very volatile and sensitive to other factors such as the budget deficit.

 

[Informal Logic]

Though I doubt it is the most important economic indicator at this current time, I selected foreign trade/trade deficits, but then I see outsourcing of jobs and even illegal immigration included in this (though also a part of unemployment/jobs).

 

[SOS2008]

SOS, I assume by 'this country' you mean 'the USA'?

Yes, this pertains to the U.S. After I posted this, I edited it to say it may belong under another section of the forum because it is of a domestic rather than global nature. Also, the poll is based on the same categories of a Gallop Poll, as it was my thought to compare these results with PF votes.

 

[ron damon]

I find high oil prices extremely positive. The higher they get, the more people will press for alternative sources of energy, and thus a greater amount of resources will be put into researching and developing alternatives to oil, or more efficient ways of transportation than the venom the automobile is. High oil prices are a dream for environmentalists.

Unemployment and taxes are low, so they are not a worry. Outsourcing is a sign of a very healthy world economy, a reflection of the spectacular growth and development of China, India, and most of the rest of east asia, which hold more than half of our species. In the US, this relfects the natural cycle of moving from simple manufacturing to more knowledge-content economic activities. This is why education is so important, and accountabiliy and results in teaching so critical in moving to the next stage of American economic life. Teacher unions and the Democrats must not be allowed to water down the quality and quantity of education kids get. Also Republicans must understand that generously funding education is the best investment a nation can make.

 

[Nereid]

Yes, this pertains to the U.S. After I posted this, I edited it to say it may belong under another section of the forum because it is of a domestic rather than global nature. Also, the poll is based on the same categories of a Gallop Poll, as it was my thought to compare these results with PF votes.

OK, thanks. I changed 'this country' to 'the US'.

 

[Informal Logic]

I find high oil prices extremely positive. The higher they get, the more people will press for alternative sources of energy, and thus a greater amount of resources will be put into researching and developing alternatives to oil, or more efficient ways of transportation than the venom the automobile is. High oil prices are a dream for environmentalists.

It would be nice if this higher cost of living would result in alternative energy. Too bad the petroleum companies have thwarted efforts to date. Now it will be all the more difficult because even if vehicles can be produced quickly to use alternative fuels, the infrastructure (logistics) of providing it cannot be done so quickly. In the meantime, the poor will struggle even more to make ends meet.

Unemployment and taxes are low...

For whom? For example, many high-tech jobs have been lost, and though these people who have lost their jobs have eventually found new jobs in other industries, they are making much less now. The statistics do not show this, nor do the stats take into account that many still remain unemployed but are no longer eligible for unemployment. With regard to taxes, the middle class continues to carry the tax burden, while the poor keeps getting poorer.

Outsourcing is a sign of a very healthy world economy, a reflection of the spectacular growth and development of China, India, and most of the rest of east asia, which hold more than half of our species.

Apparently you do not have to worry about your job. How nice for you.

Teacher unions and the Democrats must not be allowed to water down the quality and quantity of education kids get. Also Republicans must understand that generously funding education is the best investment a nation can make.

Yes, let's hope the Republicans will prevent the evil teachers and Democrats from ruining education for kids.

 

[ron damon]

Too bad the petroleum companies have thwarted efforts to date.

If we still depend upon oil its not because of some conspiracy, but because the public simply don't give a damn about the environment, and don't want to give up their precious cars and SUVs for other means of transportation (such as public). And politicians don't make a big deal out of it because they know people aren't going to respond enthusiastically to an "Apollo Program" to be free from oil in ten years. The higher petroleum prices go, the greater the economic incentive to privately produce an alternative, and the greater the pressure and cost on stupid people who want to drive Nature into oblivion.

In the meantime, the poor will struggle even more to make ends meet.

Good! Poisoning MY planet should not come cheap.

For whom? For example, many high-tech jobs have been lost, and though these people who have lost their jobs have eventually found new jobs in other industries, they are making much less now. The statistics do not show this, nor do the stats take into account that many still remain unemployed but are no longer eligible for unemployment.

Unemployment IS low (from the OECD):

"In the Euro area, the standardized unemployment rate was 8.9% in December 2004, 0.1 percentage point higher than the previous month but the same rate as a year earlier. The United States' standardized unemployment rate for January 2005 fell to 5.2%, 0.2 percentage point lower than the previous month and 0.5 percentage point lower than a year earlier."

A recent study by Nobel Laureate Lawrence Klein suggests that by 2008 outsourcing will have created 317,000 net new jobs in the US. That should appease selfish nationalists, but global capitalism's main achievement will be to lift half of humanity out of poverty, as the China example most strikingly proves.

the poor keeps getting poorer.

That is the oldest economic fallacy in the books. Average worker real income increased twenty-fold in the course of the past century. The only regions in the world where people's income actually go down are Sub-Saharan Africa and a few communist-totalitarian countries like North Korea.

Yes, let's hope the Republicans will prevent the evil teachers and Democrats from ruining education for kids.

Well, Democrats are the ones fighting testing and accountability of any kind, and promoting "social promotion" of kids who end up graduating from high schools not knowing the basics in science, math or language skills. Unless you are ready to defend the propositions that there should be no measuring of school's performance and no real consequences for negligent schools and teachers, then yes, "evil teachers' unions and Democrats are ruining education for kids".

 

[2CentsWorth]

If we still depend upon oil its not because of some conspiracy, but because the public simply don't give a damn about the environment, and don't want to give up their precious cars and SUVs for other means of transportation (such as public). And politicians don't make a big deal out of it because they know people aren't going to respond enthusiastically to an "Apollo Program" to be free from oil in ten years. The higher petroleum prices go, the greater the economic incentive to privately produce an alternative, and the greater the pressure and cost on stupid people who want to drive Nature into oblivion.

Do you really believe the public wouldn't prefer clean energy if given the choice? The case of the trolly system that once existed in Los Angeles that was purchased by a petroleum company, and dismantled and replaced with buses, didn't happen? And politicians are not influenced by campaign contributions from big business, such as oil companies?

I recall a report on the news that reviewed how the unemployment statistics do not show a complete, true picture. I know two people who have been displaced and are now making half of what they used to earn.

 

[ron damon]

Do you really believe the public wouldn't prefer clean energy if given the choice?

People would also LOVE to look like supermodels and TV stars, yet you don't see them easing up on those triple burgers.

 

[2CentsWorth]

People would also LOVE to look like supermodels and TV stars, yet you don't see them easing up on those triple burgers.

Sorry, but this analogy misses by a long shot. I have to believe that most people try very hard to keep from paying high bills, and unfortunately public transportation, if available, doesn't solve many people's requirements. And busses are an example of public transportation that relies on petroleum.

 

[Pengwuino]

Do you really believe the public wouldn't prefer clean energy if given the choice? The case of the trolly system that once existed in Los Angeles that was purchased by a petroleum company, and dismantled and replaced with buses, didn't happen? And politicians are not influenced by campaign contributions from big business, such as oil companies?

I recall a report on the news that reviewed how the unemployment statistics do not show a complete, true picture. I know two people who have been displaced and are now making half of what they used to earn.

The problem is its not just a "choice", its a sacrifice. Thats like asking some people "Would you like a clean house or a dirty house". Pretty simple answer right? What would happen if you tell them "But you need to clean it yourself or pay someone to clean it for you" then all of a sudden its not so clear. Hydrogen technology is still in its infancy. Hybrid technology has major drawbacks in the United States. You get on a freeway for a long trip and your electric engine just became a big hunk of useless metal. And have you ever gone onto a trolly system? Unless you live at a very specific area and want to go to another very specific area, trollies are useless. Buses don't have this pre-destined/unchangable route problem. No conspiracy there, just common sense. The worlds problems can't be blamed on a single interest group unfortunately.

And the "hidden picture" of unemployment is useless in an argument. The "hidden picture" of the statistics has always existed since the first stat was generated and it exists in every country so you pretty much have 1 stat to go off of and no "hidden picture" can really affect it.

You also might want to note in your "petroleum company conspiracy" that buses and other forms of public transportation are usually one of the first group of vehicles to get into new technologies. In my city, they were the first (or second... I've seen UPS use it for a while) to use natural gas vehicles, the first to use hybrid technologies, and the first to use hydrogen power.

 

[SOS2008]

For those who have supported the Bush/Republican administration yet feel compelled to preach about the environment, particularly to liberals (often otherwise known as environmentalists), briefly:

http://lomaprieta.sierraclub.org/lp0209_Population.html

On January 24, 2001, two days into his new administration, President George W. Bush reinstated the Global Gag Rule, preventing over 70 countries from receiving U.S. population and reproductive health care aid if they, with non-U.S. funds, provide legal abortion services or advocate legal abortion services. Then, a year later our President announced that he would withhold the $34 million appropriated through bipartisan efforts in Congress to aid the United Nations Population Fund (UNFPA), erroneously claiming that the UNFPA supports forced abortions and sterilization programs in China.

Bush's misrepresentation of the facts seem designed to mislead the American public about the actual effect of this policy; by reinstating the Global Gag Rule, we will see more, not fewer abortions. And:

http://www.cbsnews.com/stories/2002/06/03/tech/main510920.shtml

Bush Disses Global Warming Report
WASHINGTON, June 4, 2002

(CBS) President Bush dismissed on Tuesday a report put out by his administration warning that human activities are behind climate change that is having significant effects on the environment.

The report released by the Environmental Protection Agency was a surprising endorsement of what many scientists and weather experts have long argued — that human activities such as oil refining, power plants and automobile emissions are important causes of global warming.

But it suggests nothing beyond voluntary action by industry for dealing with the so-called "greenhouse" gases, the program Bush advocated in rejecting a treaty negotiated in Kyoto, Japan, in 1997 calling for mandatory reduction of those gases by industrial nations.

I'm sure I could find more of the same, but suffice it to say that Bush is hardly known as an environmentalist, nor the Republicans in general, and flippantly throwing claims about without sources is not constructive.

 

[ron damon]

For those who have supported the Bush/Republican administration yet feel compelled to preach about the environment, particularly to liberals (often otherwise known as environmentalists).

suffice it to say that Bush is hardly known as an environmentalist, nor the Republicans in general

OK, so instead of invalidating any of the specific arguments (preachings) that have been presented in this thread, it suffices to be known that since one doesn't officially belong to the "liberal=environmentalist" gang one must be wrong.

 

[SOS2008]

OK, so instead of invalidating any of the specific arguments (preachings) that have been presented in this thread, it suffices to be known that since one doesn't officially belong to the "liberal=environmentalist" gang one must be wrong.

No. It's only to note the irony (contradiction), but more importantly the lack of sources for claims being made.

 

[loseyourname]

Like almost everyone else, I voted for the budget deficit, mostly because nothing seems to be getting done about it. I almost felt compelled to vote for cost of living increases, however, as it strikes me at times as the most unfair of these conditions. Living in the Los Angeles area growing up afforded me the opportunity to see a huge real estate boom and, while its good for business and most homeowners, the raising of property taxes in proportion to land value is what really bothers me. People that worked hard to buy a house in a nice neighborhood and who may have even payed off the house being forced to move out when the prices shoot up and taxes becomes too high to afford is just flat out ridiculous. Ultimately, though, that's a combination of two options listed in taxation and cost-of-living inflation. Real estate booms by themselves are great.

 

[Huckleberry]

This is a difficult problem as many of these issues are inter-related. I can see why people would consider the federal defecit to be the largest problem, but I do not consider it the most important. I like to walk one step at a time. I voted for wage issues because I think it is key to solving many of these other issues and thus the most important imo.

Any independent nation that consumes more than it produces is going to face difficulty in a world economy. Corporations become rich by exploiting cheap foreign labor, and the middle and lower class of the US face more unemployment and lower salaries. By creating federal policies that either limit US consumption or increase US production we create a more stable economy for the US as an independent nation.

Both options have their own difficulties. Corporations seek profit. Many times it is not in their best interest to hire unskilled labor in the US when they can get the same quality unskilled labor in another country for a fraction of the cost. It is better for them short term if the US consumes more than it produces. US citizens want more employment and higher wages. To do this we need to produce more than we consume.

The US will either take on more isolationist policies or it will share its wealth in a largely unregulated global economy.

 

[SOS2008]

Results

Here are the result comparisons from PF versus Gallop. Since there are only 10 options available in a PF poll, I did not include Gallop's choice of "Economy in general" but I also feel this shouldn't have been included, because it distracts from the rest of the choices. As you can see, people selected Fuel/Oil prices as the most important in the Gallop poll, whereas PF members voted most for federal deficit/debt. The ranking of importance was taken from part of a poll conducted Apr 4-7, 2005:

ECONOMIC PROBLEMS
1. Economy in general
2. Fuel/Oil Prices
3. Unemployment/jobs
4. Federal budget deficit/federal debt
5. High cost of living/inflation
6. Taxes
7. Lack of Money
8. Wage issues
9. Gap between rich and poor
10. Foreign trade/trade deficit
11. Corporate corruption

 

[gravenewworld]

The gallop poll clearly shows the public doesn't know Sh!t about economics and the macroeconomy. If people knew that increased foreign debt means that foreign interests own more and more American assets, then I guarantee that you would see the trade deficit much higher on the list.

 

[stoned]

i voted for corruption and it is true. everyone from poor to the super rich is corrupt in some way. not paying for bus fare to the billion dollars accounting scams ( not to mention behavior of politicians here) this country is the epitome of corruption, nothing short of civil war will ever eradicate this.
and guys, look at salaries of CEO's in USA this is simply obscene !

 

[loseyourname]

I'm not so concerned about corruption. Humans have been corrupt for as long as there have been economies and humans will be corrupt when the last economy dies. It's more of a constant than a variable. Wealth has managed to grow nonetheless.