eyes on the U.S.

Facing The Fiscal Cliff, Obama Is Best Hope For Global Economy

President Barack Obama with his Chief of Staff Jack Lew
President Barack Obama with his Chief of Staff Jack Lew

-Op Ed-

SANTIAGO - The most urgent problem for the second term of President Barack Obama or the first term of President Mitt Romney will be a problem that neither of them created. We are talking about the cryptically dubbed ‘fiscal cliff,’ which, if it is not solved, will push the United States into another recession in 2013.

It is a budgetary problem. Last year, the White House proposed increasing the debt ceiling to finance spending, and Congress rejected the proposal. The Republican majority opposed increasing the debt ceiling and also opposed increasing taxes. The only option they would accept was to reduce government spending, while the President and Democrats in Congress tried to push through stimulus programs that increased spending.

Faced with the impasse, Congress named a bipartisan super-committee to find a solution. But if the so-called super-committee does not come up with one, in January 2013 automatic tax increases and cuts in public spending will kick in.

The fiscal cliff would include both the expiration of the Bush tax cuts and the end of cuts to employers' taxes, put in place by Obama. It would also mean the end of unemployment insurance and drastic cuts in public spending for defense, healthcare and other government sectors, for a total of $100 billion in cuts per year. According to the Congressional Budget Office, that would prompt a 1.3 percent contraction in the US economy next year.

With most of Europe in recession, Japan stagnated, China slowing down and the US still shaky, a new US recession could have wide-reaching and unpredictable consequences for the global economy. There is no question that the strong numbers in Latin American economies will cool. In this scenario, there would be a real possibility of a global depression, just as we nearly experienced four years ago.

If Obama is reelected, he will probably decide to let the Bush tax cuts expire, but he will also have to make drastic spending cuts if he wants any possibility of support from a congress that will continue to be in Republican hands.

If Romney wins, he will probably have more liberty, since he will have a Republican congress. He will probably make the Bush tax cuts permanent, at the same time that he pursues a drastic program of cuts on everything except defense. And he will try to kill Obamacare.

In either case, one has to note the discouraging level of discourse in Washington. The fiscal cliff is the best example of how Republicans and Democrats cannot agree on running the country. They are operating in exactly the style of Latin American countries.

This legislative polarization has been reflected in the presidential campaign, and in the opinions of the supporters of both candidates. The dialogue has drifted towards insults, and in some cases, lies.

The candidates themselves have not behaved much better - one accusing the other of being a socialist, the other retorting that his opponent is a capitalist bloodsucker.

But the economy and business are only one component of the global village. Obama is much more popular than Romney around the world and he is a much more viable negotiator, politically and economically, in Asia, Africa and the Middle East.

Obama offers stability and a United States that is more democratic and encourages dialogue. Romney symbolizes the imperial eagle. After considering the issues at stake, America Economia has decided to support Barack Obama.

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Future

How Facebook's Metaverse Could Undermine Europe's Tech Industry

Mark Zuckerberg boasted that his U.S. tech giant will begin a hiring spree in Europe to build his massive "Metaverse." Touted as an opportunity for Europe, the plans could poach precious tech talent from European tech companies.

Carl-Johan Karlsson

PARIS — Facebook's decision to recruit 10,000 people across the European Union might be branded as a vote of confidence in the strength of Europe's tech industry. But some European companies, which are already struggling to fill highly-skilled roles such as software developers and data scientists, are worried that the tech giant might make it even harder to find the workers that power their businesses.


Facebook's new European staff will work as part of its so-called "metaverse," the company's ambitious plan to venture beyond its current core business of connected social apps.

Shortage of French developers

Since Facebook CEO Mark Zuckerberg announced his more maximalist vision of Facebook in July, the concept of the metaverse has quickly become a buzzword in technology and business circles. Essentially a sci-fi inspired augmented reality world, the metaverse will allow people to interact through hardware like augmented reality (AR) glasses that Zuckerberg believes will eventually be as ubiquitous as smartphones.

The ambition to build what promoters claim will be the successor to the mobile internet comes with a significant investment, including multiplying the 10% of the company's 60,000-strong workforce currently based in Europe. The move has been welcomed by some as a potential booster for the continent's tech market.

Eight out of 10 French software companies say they can't find enough workers.

"In a number of regions in Europe there are clusters of pioneering technology companies. A stronger representation of Facebook can support this trend," German business daily Handelsblatt notes.

And yet the enthusiasm isn't shared by everyone. In France, company leaders worry that Facebook's five-year recruiting plan will dilute an already limited talent pool, with eight out of 10 French software companies already having difficulties finding staff, daily Les Echos reports.

The profile of Facebook founder Mark Zuckerberg displayed on a smartphone

Cris Faga / ZUMA

Teleworking changes the math

There is currently a shortage of nearly 10,000 computer engineers in France, with developers being the most sought-after, according to a recent study by Numéum, the main employers' consortium of the country's digital sector.

Facebook has said its recruiters will target nations including Germany, France, Italy, Spain, Poland, the Netherlands and Ireland, without mentioning specific numbers in any country. But the French software sector, which has so far managed to retain 59% of its workforce, fears that its highly skilled and relatively affordable young talent will be fertile recruiting grounds — especially since the pandemic has ushered in a new era of teleworking.

Facebook's plan to build its metaverse comes at a time when the nearly $1-trillion company faces its biggest scandal in years over damning internal documents leaked by a whistleblower, as well as mounting antitrust scrutiny from lawmakers and regulators. Still, as the sincerity of Zuckerberg's quest is underscored by news that the pivot might also come with a new company name, European software companies might want to start thinking about how to keep their talent in this universe.

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