Tuesday, January 10, 2012

Think like a ManagerEconomist!

For the fact is that running a business is nothing at all like making macro policy. The key point about macroeconomics is the pervasiveness of feedback loops due to the fact that workers are also consumers. No business sells a large fraction of its output to its own workers; even very small countries sell around two-thirds of their output to themselves, because that much is non-tradable services. 
This makes a huge difference. A businessman can slash his workforce in half, produce about the same as before, and be considered a big success; an economy that does the same plunges into depression, and ends up not being able to sell its goods. Nothing in business experience prepares one for the paradox of thrift, or even the inflationary impact of increases in the money supply (which is real when the economy isn’t in a liquidity trap.)
 Managers can not run a country  the way like running company but he/she has to think like –must-  think like a managereconomist.  This is heck of  interesting points, yes mangers are not trained to think of the paradox of two differences; fire 50% work force, make lean and mean hungry organization, manager don’t care where the 50% workforce end up that is not managers’ job  to worry about it, as his/her job is much of the single organization, sometimes soul destroying things happen but when you are hired to do the job… well … a glass of wine well do…end of the day…managers’ song sheets are not “job creation, job creation jobs but lean and mean and hungry and profit. Where a president of country his/her song sheet  paradox “job creation, jobs… jobs …AND lean and mean and hungry and profit.” Where is the jobs of the result of mean lean hungry  for the 50%? Well that is not a glass of wine for sure!

 P.S. Apparently a republican presidential candidate putting a wording  in such way that evoke a such vampire flees  blogs:
 Aaron Carroll:Lotsof people can’t fire their insurance companies | The Incidental Economist: Gov. Romney is not saying that he enjoys telling people that they no longer have a job. He’s saying that, when it comes to health insurance, if a company is doing a bad job, he would enjoy telling them to take a hike. Who wouldn’t?
….  keep reading 
Here also another Krugman' blog mentioned -Who Fires Whom? 

When organization change or re-engineering actually not only destroying jobs but also creating jobs but the creating jobs are not equal match as much as destroys as i.e. replacing human to technology, better knowledge management, outsourcing,  processing, and  also resources allocations etc…. so  economists should be aware that you can not runs a company in such inefficient way because sake of jobs- end of the day not only the single business suffer but  whole society suffer that is equal putting!  So if the company runs better way and more export and more profit, - even eventually creating more jobs -so that end of the day pay more tax, so the government  able to better spending to healthcare etc…So there!

When a surgeon front of patient at the operating theater, the  grave patient need to operation otherwise she would die,  the surgeon doesn’t care whether the patients lose one leg or not, if his job is saving her life, the surgeon is just do it.