Re­turn to re­ces­sion

Enterprise - - Contents -

Says Jim Rogers, the pioneer of hedge funds and a renowned currency trader, “Since the be­gin­ning of time there has been a re­ces­sion ev­ery four-to-six years and that means an­other one is due around 2012. The world is go­ing to be in worse shape be­cause the world has shot all its bul­lets.” Say­ing this, Rogers also re­ferred to Ben Ber­nanke, Chair­man of the US Fed­eral Re­serve, “Is Mr. Ber­nanke go­ing to print more money than he al­ready has? No, the world would run out of trees.”

This grave pic­ture sketched by Rogers is fur­ther strength­ened by IMF’S warn­ing stat­ing that the global econ­omy is at risk of slip­ping back into a re­ces­sion if the US does not take sig­nif­i­cant steps to bol­ster its weak re­cov­ery and Europe does not take strong ac­tion to prop up its fail­ing banks and sov­er­eign debt prob­lems within each coun­try.

The warn­ing came as the IMF got star­tled over the down­grad­ing of credit rat­ing in Italy and France, the pulling out of mil­lions of dol­lars from the banks over wor­ries that they would col­lapse due to their high ex­po­sure to Greek debt which is it­self un­der­go­ing an­other round of deep aus­ter­ity cuts in or­der to get ac­cess to an­other $11 bil­lion of the $110 bil­lion in emer­gency funds set aside by the Euro­pean Cen­tral Bank, and the ef­forts of fel­low Euro­pean mone­tary part­ners to keep Greece from de­fault­ing. In ad­di­tion to the con­cerns of Ja­pan’s pub­lic debt, IMF also fears that an­other re­ces­sion would take back the in­dus­tri­al­ized coun­tries into re­ces­sion.

There are many an­a­lysts who view the cur­rent pain be­fore the econ­omy fi­nally re­bounds as short lived and ex­pect peo­ple flush­ing with cash and pay­ing down their long term debt. How­ever, a pop­u­lar ma­jor­ity dis­cards this op­ti­mism, as they blame the global busi­ness com­mu­nity to take ill ad­van­tages of the rad­i­cal eco­nomic changes by keep­ing wealth in their hands and dom­i­nat­ing global eco­nomic poli­cies in their best in­ter­ests. It is held un­for­tu­nate that the leap in tech­nol­ogy, telecom­mu­ni­ca­tions and the knowl­edge econ­omy have not been uti­lized to im­prove the liv­ing con­di­tions or nar­row­ing the so­cio-eco­nomic gap be­tween classes and ex­pand the mid­dle class. Thus, the new cap­i­tal­ism has gained a uni­ver­sal sta­tus by not only ex­ploit­ing global re­sources but also the sav­ings of work­ers in eco­nom­i­cally de­vel­oped and de­vel­op­ing coun­tries.

It is due to the ad­vance­ment of tech­nol­ogy that has en­abled speedy online trans­ac­tions for the new cap­i­tal­ist sys­tem to con­nect global mar­kets and put them un­der its full con­trol. Thus, the cap­i­tal­ism af­fects large so­cial cat­e­gories sur­mount­ing bor­der and across con­ti­nents.

Now these large groups of peo­ple from across the world have come to the re­al­iza­tion that fi­nan­cial cap­i­tal, heads of banks and in­ter­na­tional in­vest­ment in­sti­tu­tions, and spec­u­la­tors in Western coun­tries, have joined to push them into poverty and con­fis­cate their sav­ings. This has re­sulted in the uni­fi­ca­tion of the de­mands of pro­test­ers in the cap­i­tals and cities of Euro­pean, African and Asian coun­tries. Their de­mands fo­cused on the need to stop cap­i­tal­ist greed and fi­nan­cial cor­rup­tion and pro­vide jobs and so­cial ser­vices.

This is ev­i­dent by tens of thou­sands of peo­ple from across the United States and around the world who are sup­port­ing the Oc­cupy Wall Street move­ment. Over hundreds and thou­sands have gath­ered in cities and towns to protest un­prece­dented con­sol­i­da­tion of wealth and power, plum­met­ing house­hold in­come, sky­rock­et­ing school debt, and a bro­ken po­lit­i­cal sys­tem. A num­ber of peo­ple have made their pres­ence through send­ing their per­sonal notes of sol­i­dar­ity and sup­port.

But ex­perts say that there is no ar­gu­ment on the mes­sage of the protest, but the lo­ca­tion of the pul­pit be­ing Wall Street is fu­tile as the self­pro­claimed ‘99 per­cent’ masses will be un­able to shift the think­ing of un­ea­ger one per­cent elite. They sug­gest that rather the ma­jor­ity of young stu­dent pro­test­ers should stage sit-ins out­side the busi­ness schools so that the fu­ture bankers, traders and po­lit­i­cal lob­by­ists can be tar­geted.

Thus, it is not cer­tain whether the next global re­ces­sion can be avoided, but there is a clear need to re­think busi­ness by pro­vid­ing new train­ing to fu­ture busi­ness lead­ers to view their roles, an­a­lyze risks and un­der­stand the moral im­pli­ca­tions of strate­gic de­ci­sions

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