I will continue from where I left last time. As I told, mornings have become colder. It takes a while to warm up in the morning. In few days it will start creating trouble and then it will gradually become a challenge to get myself out of bed in the early hours and go for walks. Anyway, that something usual. We were discussing about the unusual stuff that is grappling the whole world - the infamous economic slowdown. In my last post I was very keen to compare this slowdown with the one that destroyed the capitalist world in 1930. It is still considered a misnomer in the countries which were worst affected that time.
But the capitalists of today are dreaded to accept the fact that this economic crisis is going to be similar as the one in 1930. In a recently published article in Monthly Review magazine (a leftist publication from the USA) it has been very categorically compared with the great depression of 1930. William Tabb(Professor, queens College, City University of New York), in his article (which is actually a Lecture given in the University of Vermont, has told it very clearly how this crisis is going to be worse than even the 1930. In his Lecture, he has mentioned great examples how things went wrong in the US, which finally culminated into this economic massacre. This lecture also mentions about how charmed Nicholas Sarkosy is with the US model of capitalism and says that the capitalism is a system that has enabled the extraordinary development of western civilization. And Sarkosy goes on to say that Anti-capitalism is no solution to counter this crisis. I was today discussing this factor with my father, who himself is a great follower of Marxism and the result was that this needs to be tackled in a completely different way. George Bush (Junior) the outgoing president of the USA has, in a way, succumbed to the fact that the dirty and ugly face of capitalism and free markets is not going to help even the Americans. This was very evident in few of his recent actions and gestures which he'd shown in his outcry. Even in low town, Bush has started talking about the concept of nationalization of banks and financial institution. No wonder, he is shitting bricks in this event of crisis. No big deal that Americans become the most conservative souls in this world and change their outlook towards life. Until now, Americans don't have the habit to save monies. Now probably they will.
In the same lecture Professor Tabb has also sighted two very relevant examples of how two very developed nations (one Asian and another European) dealt with the internal economic recessions and came out of it. The Asian nation was Japan, which took resort to the Paulson Approach (The much coveted US$ 700 billion bailout plan), which received severe criticism within the USA. In 1990s, Japan, like USA, didn't realize the size of the crisis and started bailing out the financial institution financially. Today, Japan may not be into a state of crisis but it’s also true that it is not the same Japan which ruled the world of manufacturing and technology. It banking system is still not in the best of health. Tabb's second example, the European country was Sweden. In case of Sweden, it took over and reorganized the banks under state ownership. In 1985, Sweden deregulated its credit markets, leading to the same situation as the US is in today. As a result, the bubble burst leaving 90 percent of the banking sector with massive losses, including the countries largest banks. In the way to restructuring, Swedish authorities decided to intervene and then the growth came back on track. If this is any learning, America should be following this model. I think it already, in somewhat way, is coming on the track to this way. George Bush says that the Paulson Approach is only there for some institutions and not all. In fact the buying out of AIG (America's largest insurance player) is the first step. But it is futile to expect too much from this nation, which is sold to capitalism. The people of this Model nation (for the rest of the world) don't think the way I or Professor Tabb is asking them to think. Soon after the crisis shows the signs of decline, this nation will again start boasting of its capitalist regime and ethos. It will really not remember the miseries which it is reeling under today.
A few days ago, I was talking to an American lady (online), who happens to be a Life Sciences teacher in the state of California. She was almost in tears and said the government has kept its people in dark in terms of expenditure and engagements in wars around the world. But she was not really known to the real reasons why America has fallen prey to this economic recession. Americans won't even agree to become communists, is a cast in stone. But at the same time it will not be able to stand above the rest of the world. If you've noticed that there is a very uncomfortable silence on the issues such as Iranian and North Korean nuclear programs. American intervention in Afghanistan is also in a cold bag. Probably Americans want to just leave Iraq on its own at this stage and just get the hell out of that region. Probably Americans won't be interested into anything else but to save itself from the crisis as of now.
This is probably the best time to mobilize a new world order. As American goes into deep depression and feels vulnerable to spend even a single penny without reasoning and as the oil prices keep falling due to drastic shortfall in the demand (specially from the Americans), its the best time to create a new world order. The oil and gas reserves (apart from the traditional gulf nations where the resources are diminishing) are now concentrated in countries where America can't dare command. The Venezuelan oil reserves and Russia's gas resources can be exploited in order to create this new world order. I wish America crumbles and this new world order emerges wherein India is forced to change its political and economic affiliation with the USA.
Today, Manmohan Singh is calling the US capitalism the "Casino Capitalism", the meaning of which is very clear and straight. America gambled and lost the entire bet. Now when it recoups to gain force, its time to shift the epicenter of world's political and military power to forces which are friendly to the human beings and not anti humans like the America.
Saturday 25 October 2008
Tuesday 21 October 2008
Mist, Meltdown and Miseries
"Winter either bites with its teeth or lashes with its tail." I'm sure many of you have read/heard this old proverb. From extremely moist and humid, the winter is changing its colors now. I've been feeling this for past few days while I go for my morning walk before the rise of the Sun. It feels very good. The best of innovative thoughts strike your mind when you are to yourself and least affected by the routine, mundane and rubbish activities of the day. I wake up quite early in the morning. These days I don't need an alarm. There's a natural wake-up call these days. Ananya (my 17 days old daughter) gets up invariably at that time every morning and creates ruckus all over.
The Sun has started giving solace rather than being treated as an unsolicited guest every morning. There's a thick carpet of dew on the grass all over every morning now. The initial shiver and laze leaves the body only after a few rounds of walk. Of all seasons, I adore winters the most. It certainly is not one of the popular choices yet I feel I am most productive during winters. I get inspired by the sheer feeling of cool breeze in the air.
This winter, unlike others, is little unusual. The feeling is different. Despite the so-called festive season around there's no zing in the air. Global meltdown and economic downturn has hit the entire world. Even wwe Indians are not spared of this onslaught. Stock markets across the world have perished. Trillions of dollars have sunk and the middle class, which wants to earn quick money, is feeling extremely vulnerable. America, the world's strongest consumer market, is pledging for help. The European Union seems to be on its knees to follow its big brother the US. Once considered the world's richest and healthiest companies, are already history. World's largest financial powerhouses are all hoping against the hope. They're all biting the dust one after another. Is it winter that's playing nasty? Greatest of the stalwarts are now showing remorse in what they promoted. All of a sudden 'Das Capital', Marx's answer to capitalism, has started gaining popularity in various parts of Europe. Why? People have started realizing that excessive lust for wealth leads to such massive falls. This is probably just the beginning of a new conscious age wherein people will question the ideology of capitalism and liberalism. Winter's really going to be chilly this time.
The ripple effect of this all is just not confined to those individuals and/or nations who committed the crime which led us to this state but has engulfed the entire world order whosoever was dependent on these so-called prosperous economies of the west. The entire world has started crumbling to this deep rooted economic downturn.
If the Great Depression of the 1930s was the economic event of the 20th century probably it wouldn't be any exaggeration to call this crisis the event of 21 century. Both are very similar in nature and the epicenter of both is in the US.
The Great Depression of 1930 began in 1929 when the entire world suffered an enormous drop in output and an unprecedented rise in unemployment. World economic output continued to decline until 1932 when it clinked bottom at 50% of its 1929 level. Unemployment soared, in the United States it peaked at 24.9% in 1933. It remained above 20% for two more years, reluctantly declining to 14.3% by 1937. It then leapt back to 19% before its long-term decline. Since most households had only one income earner the equivalent modern unemployment rates would likely be much higher. Real economic output (real GDP) fell by 29% from 1929 to 1933 and the US stock market lost 89.5% of its value.Another unusual aspect of the Great Depression was deflation. Prices fell 25%, 30%, 30%, and 40% in the UK, Germany, the US, and France respectively from 1929 to 1933. These were the four largest economies in the world at that time.
If that was some example, this depression is going to be no less fatal. May be the potency will vary from country to country but the fact remains that it is going to affect the lives of millions. Miseries have started engulfing the lives of the middle class everywhere.
To be continued...
The Sun has started giving solace rather than being treated as an unsolicited guest every morning. There's a thick carpet of dew on the grass all over every morning now. The initial shiver and laze leaves the body only after a few rounds of walk. Of all seasons, I adore winters the most. It certainly is not one of the popular choices yet I feel I am most productive during winters. I get inspired by the sheer feeling of cool breeze in the air.
This winter, unlike others, is little unusual. The feeling is different. Despite the so-called festive season around there's no zing in the air. Global meltdown and economic downturn has hit the entire world. Even wwe Indians are not spared of this onslaught. Stock markets across the world have perished. Trillions of dollars have sunk and the middle class, which wants to earn quick money, is feeling extremely vulnerable. America, the world's strongest consumer market, is pledging for help. The European Union seems to be on its knees to follow its big brother the US. Once considered the world's richest and healthiest companies, are already history. World's largest financial powerhouses are all hoping against the hope. They're all biting the dust one after another. Is it winter that's playing nasty? Greatest of the stalwarts are now showing remorse in what they promoted. All of a sudden 'Das Capital', Marx's answer to capitalism, has started gaining popularity in various parts of Europe. Why? People have started realizing that excessive lust for wealth leads to such massive falls. This is probably just the beginning of a new conscious age wherein people will question the ideology of capitalism and liberalism. Winter's really going to be chilly this time.
The ripple effect of this all is just not confined to those individuals and/or nations who committed the crime which led us to this state but has engulfed the entire world order whosoever was dependent on these so-called prosperous economies of the west. The entire world has started crumbling to this deep rooted economic downturn.
If the Great Depression of the 1930s was the economic event of the 20th century probably it wouldn't be any exaggeration to call this crisis the event of 21 century. Both are very similar in nature and the epicenter of both is in the US.
The Great Depression of 1930 began in 1929 when the entire world suffered an enormous drop in output and an unprecedented rise in unemployment. World economic output continued to decline until 1932 when it clinked bottom at 50% of its 1929 level. Unemployment soared, in the United States it peaked at 24.9% in 1933. It remained above 20% for two more years, reluctantly declining to 14.3% by 1937. It then leapt back to 19% before its long-term decline. Since most households had only one income earner the equivalent modern unemployment rates would likely be much higher. Real economic output (real GDP) fell by 29% from 1929 to 1933 and the US stock market lost 89.5% of its value.Another unusual aspect of the Great Depression was deflation. Prices fell 25%, 30%, 30%, and 40% in the UK, Germany, the US, and France respectively from 1929 to 1933. These were the four largest economies in the world at that time.
If that was some example, this depression is going to be no less fatal. May be the potency will vary from country to country but the fact remains that it is going to affect the lives of millions. Miseries have started engulfing the lives of the middle class everywhere.
To be continued...
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