Financial Management Appraisal of U.S. Administration Non-Keynesian Approach to Tackle Recession: Overemphasis on Employment of High Skilled-Cum-Aged Labour (Forming Minority) at the Expense of Majority Unskilled Labour Does Not Augur Well for Economic Recovery
Journal of Financial Management and Analysis Vol. 24 No.2 (Jul-Dec 2011)
Posted: 2 Apr 2012
Date Written: March 30, 2012
Abstract
Inasmuch as the U.S. economy has been very slow in recovery from deep recession with unemployment hovering around 9 per cent due to the non-keynesian approach of the U.S. administration which has overemphasised on recruitment of high-skilled-cum-aged labour (forming the minority) at the expense of employment of low-skilled labour who form the majority of the population thus dwarfing the multiplier effect leading to sluggish effective demand and further slowing down of the U.S. economy. The strategy suggested in this study for fast recovery is to generate effective demand by creating employment for low-skilled-cum-less educated people who form the bulk of the population through establishment of medium-scale enterprises and to improve the quality of life by promoting large-scale affordable housing facilities for the majority poor (at the poverty level of annual income of US$ 22314 for a family of four persons) Americans for whom the marginal utility of one U.S. dollar is worth much more than to a millionaire for whom it is worth almost nothing.
Keywords: U.S. economy, Non-Keynesian approach, High-skilled labour, Majority poor, Unemployment
JEL Classification: E12, E24, J31, O14, O32, O51
Suggested Citation: Suggested Citation