Posts tagged cut

How can Monetary Policy help people represented by Silver Cougars?

Angela Soracco of Silver Cougars of America has sent a letter quite concerned about the current inflation of 9%. Silver Cougars of America is an organization of senior citizens and they are being heavily relaint on Social Security day by day. How can the government implement monetary policies to help old seniors to lay off the inflation burden?

There are two ways to control the inflation. First is to increase the interest rate and second is to cut down the money supply on the market. First of all, by increasing the interest rate, many people will tend to save their money and not spend. This will lower the demand-pulled inflation to some degree. Also, by cutting down the money supply flowing through the market, the value of the currency will go up and therefore it will lower the inflation rate.

Nonetheless, there is one serious drawback to this policy. It will aggravate the negative economic growth and skyrocket unemployment rate in return. So, there is a trade off. Governments would look at the opportunity costs of implementing this policy and consider whether it will be worth of a try or a bad choice.

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JAL receives far more early retirement applications than planned

The Japanese Kanji for Loyalty

Breitbart: News Article

According to Breitbart, Japan Airline (JAL) has received 4,000 early retirement applications, which far exceeded the intended amount of 2,700 applications.

JAL has been filed for bankruptcy protection by the Japanese government and has determined to cut down its employment cost along with other costs.

“JAL has indicated that its creditors have asked the airline to expand its group-wide job cuts from the originally planned 15,700 over the next three years. It is now considering a plan to cut 16,400 jobs from its current group workforce of 50,000 by the end of March 2011.”

According to Nihon Keizai Shimbun, as the future of JAL became vague, many of JAL employees have volunteered for an early retirement.

In my opinion, this showed one aspect of Japanese business culture. The employees are very very loyal to their company. Unlike other countries with boisterous labor unions, many Japanese workers accepted ‘voluntary’ retirement. However, I have sensed the feeling that not only Japanese worker’s loyalty has caused this. I think that there could have been some ‘forceful’ atmosphere during the ‘suggestion’ of voluntary retirements.

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