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Generational Dynamics |
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Outsourcing should accelerate even more after the November 2 Presidential election, according to India's top outsourcing firms, who have already been showing record profits.
Many American firms have been outsourcing numerous categories of jobs to India, where salaries are just 20% of American salaries. Even companies that would prefer to continue hiring Americans have been forced to hire Indians instead, in order to remain competitive.
However, outsourcing has been made an election issue by John Kerry, and this has inhibited some outsourcing of jobs, but that's expected to end when the election is over, according to analysts.
These developments portend an even more difficult American labor market next year, and they also shed light on a mystery.
From the point of view of Generational Dynamics, the American economy is entering a new 1930s style Great Depression. In fact, with current stocks overpriced by a factor of 2 (as measured by standard price/earnings ratios), why hasn't there been a sharp fall in stock prices?
It's beginning to look more and more that a wide variety of plans and expectations around the world are awaiting the election.
For example, as we've recently written, there is a widespread expectation that American forces will be withdrawn from Iraq in 2005, even though both Bush and Kerry have expressly denied planning this, and even though such a withdrawal would be extremely dangerous to Israel.
Now we see by example that many financial decisions are also being postponed.
In today's campaigning hothouse, it's almost impossible to give a weather report without someone making a political accusation. Any company that announces good news or bad news, especially about things like layoffs or outsourcing, risks political accusations and possible retribution. For that reason, many decisions are simply being postponed until after the election.
If there are many negative decisions that have been postponed until
2005, this might mean that the major stock market fall predicted by
Generational Dynamics may also wait until sometime in 2005.
(18-Oct-04)
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