It is important to understand the basic fibre of these capitalist countries. The US and the entire European Union has its roots in the Capitalist ideology. It is a system wherein Govt only deals with basic State function. They neither take part in the planning for a economy to develop nor they have any rules or regulation in place for the developing an all round development of economy. Market, is their mirror. Everything in these economies will depend upon the market and every market depends upon the buyer. Market will be non-existent without the buyer and that's the reason why the buyer is the king here. He decides what he will buy and what should then be produced.
It is here that to attract the buyer, credit system comes into the dealings and the entire US economy was booming due to the credit made available to Americans. The market forces decided what was to be produced and to what an extent, besides the credit facilities stabilized the demands for these products.
Now, the Republicans are the most stubborn supporters of these capitalist policies. The most of Republican party has top leaders of businesses, who are top CEO of top Multinationals, as their members. While the democrats have little flexible approach to these issues.
The problem here now is the Economic Package of $700 Billion, is stuck. The Republicans will not support it as it is against their ideology, while the Democrats will support it, but they are out of the power centre at the moment. Hence the Bush Package will face tremendous opposition and even if the Bill passes in both the Houses, Republicans could work hard to fail such a bail out plan from nearing success. They might put forward arguments like the misuse of tax payers' money, but where these tax payers' money and concern for it goes when the question arises regarding the banks going bankrupt. What about the safety for investors? Why were no precasutions were taken when the sub prime scandle was detected ? Why were tax benefits were allowed in the first place to those MNCs who were exporting jobs outside the America ?
The issue of tax payers money has no role to play in widely hypocritic country like USA, in which when you say something, the meaning is something else, while the target audience is somewhere else and benefits some where else. USA democracy is no different from Indian mobocracy. Though we Indians will accept it, while if you say this to any American he will show you how arrogant he is and to what extent he could go to refute you. But for once it is assumed that it is not the case then why fewer and fewer people benefit from Govt policies and why large number of people still work for their bread. The scenario is not different from India.
Bush Administration is working hard to avoid the repeat of what had happened in the great depression of 1930, where the Govt. at that time just allowed all the banks to register their bankruptcy and such banks crossed into thousands. These bank had no liquidity and that caused the great depression to go on for 9 long years. Had there been a solution as mooted by Bush, in place, banks could have been helped to avoid the liquidity crisis and there might have been chances that the great depression might have had ended earlier than the beginning of the second world war.
It finished every American and destroyed every American Dream. Thanks to Adolf Hitler who initiated war against the Europe and in particular the UK and became to casue the starting of second world war, US economy started to role during the second world war as Americans had emerged as the largest suppliers of Arms and Ammunition to allied forces. The war fuelled the depressed economy into one of the most vibrant economies of the world at that time and it remained so for nearly six decades.
Is it Iran this time ? Or Pakistan ? or North Korea ?
There may be few takers for the Bush Administration plan for $700 Billion package but that's what perhaps he was expected to do. Remember that Bush Administration had little choice except this bail out plan. And also remember he is a Republican and Republicans are most conservative about the identity of USA as the parent country following the capitalist form of Govt and prospering. They have been supporting this country to be absolutely CAPITALISTS. The Democrats have a little different ideology. They are of the view that they need not be that stubborn on any of the issues relating to the national interests. That is perhaps the reason for the Republicans to oppose the Bush package and inversely the democrats are supporting what Republicans should have been doing.
The seriousness of the crisis in which the USA is at the moment can be gauged from the fact that the most Conservative party, headed by Mr. Bush has mooted a $700 Billion package. As written in the previous write up, it is perhaps for the first time that such a move which could be termed as the direct Govt interference in the USA economy.
The package is directly and indirectly pump the said money into the US economy. It may be buying of assets of those bankrupt investment banks as well as allowing tax concessions to those affected or many other ways which will be asked to Administration of Mr.Bush. But considering all those consequences as analysed in my previous write ups, this package is an improvement over mistake committed by the US administration in 1930, when it had become silent spectator and left the entire US economy and economies of world in suspended animation for another 9 years. Bush is perhaps trying to avoid the same scene happening in 2008.
But how can you refuse to agree with me that the fall in wall street had made Karl Marx happy. he must have been telling to himself that he had envisaged such an outrage world over and had warned the humankind for such events happening in future. But like the products which they sell comes along with attractive packagiing materials, Capitalism mesmerized the world with the development and prosperity to all. All the gains and positive sides were very cleverly highlighted.
For all these years it had been an open policy to call communist countries an Evil Empire, especially the then USSR. One can not forget that famous speech of Mr. Ronald Reagan, when he was advocating his ambitious Star Wars programme. But as far as it is known to the world, that when the USSR fell, no common men on the streets of New York lost their money in stock market or real estate or anything that was connected with bread and butter of a man in Mumbai to Hawaii to Perth to Dubai. There was no share market collapse, not a single investor had lost money the way the people have lost their money now. The world Governments are doing overtime to find ways to tide over this crisis. The most conservative Governments of Europe are readying to start interfering with the economic activities, presumed to be one of most unholiestic act of any capitalist country. European Govt have already pledged huge sum of money for their Banks, whether commercial or investment, to steer off from this crisis.
Today the scene is that everybody on this earth has lost something due to the American recession. It was not enough for the corporates to loot the gullible American citizens, they under the agies of globalization had started looting the world population as a whole. They had reached a stage where they can not further loot the people and then fell.
Imagine, the dollar should have become weak due to recession in America, the world over. Even with the Bush Administration going gunge ho, about the $700 Billion salvage package, the Rupee has been seeing a new low everyday and not the dollar. Money for the sub-prime loss has already been recovered with the large scale oil price speculation. Large funds from all over the world had already been swept by the speculators who are managing this show. Not satisfied with the already on the knees the investors world over, this new drama of investment banking bankruptcy has started. We as Indians will have to be silent spectators, while all our cloths from our body are taken away.
The rising dollar, despite the sub-prime crisis and consequent American rescue act, creates a doubt of utter market manipulation. This is not free market economy. With rising dollar, the demand for oil will go down further the world over. This will make the Americans to buy oil at cheaper rate. Understanding this nitty-gritty requires in depth knowledge and information and also the source as to who is handling this and in perfect co-ordination with the US interest.
In short the capitalist system has failed as that of communist system. Both the systems had chances of failure, which were overlooked by its over-zealous followers. There is one more such system which is waiting to be in line of the two ! The Chinese mix of capitalism, communism or dictatorship. Oh ! what a confusion ! It will continue till the citizens find its benefits and are not exploited the way other two systems exploited its own civilians and failed. Dishonesty and misuse of power by those who had it, crossed all levels and such a scenario was always in making.
With every passing day, Karl Marx smile is widening and perhaps after years of wait, finally his soul would be happy.
Considering the Indian side of this crisis perhaps our Finance Minister has no idea about the extent to which the Indian economy is dependent on Global markets and how far the India Inc. could get affected due to this meltdown in USA, as at the time of booming share market he was not letting any opportunity go to claim the credit for making the country's economy vibrant, is not accessible these days. Perhaps sitting with our home minister Mr. Shivraj Patil, who is trouble following Delhi serial blasts.
It is urgently required that Indian Government implement the policy of creating and building national base for capital, required for the development. We must forget the old days of cheaper capital coming to our country at all. Govt must pool all its resources and support the India Inc. to get cheaper capital and if required should bear the cost difference in rates. This should give momentum to slowed down developmental work. It is highly expected that the developmental work including the infrastructure will require huge capital.
One thing we are assured of so far is, our banks have not gone kaput, like that of American and European banks. We need to consolidate with this from now onwards. RBI should reduce the CRR further to make available the idle cash for the developmental area. Mr. Finance Minister and the team of so called economists with this Govt must ensure that the funds so made available by RBI by cutting CRR and other such measures reach the infrastructure projects or such huge projects such as electricity or dams. This will fuel the domestic market and a powerful shock absorbers can be created within the country to guard against tremors coming from the west.
If and when the US economy picks up steam, Indian economy will be ready to accept the investments coming from US a7 Europe.
This is not as simple as it seems to be and the way I have written. Economies have many complex issues to tackle and contentious issues to sort out. But the bottom lines always remain the same. The solution to our problem always lies with us and not the neighbour. Same way Indian economic woes could worsen, if the our Finance Minister waits for the US treasury to announce similar package to salvage Indian economy. HE must realize that Capitalist ideology has failed and he must adopt something a mixture of everything....like the Chinese are doing. They themselves, perhaps do not know what ideology they are following....except for the communists in India, who still follow communist ideology of 19Th century......KARL IS STILL SMILING.....!!!!!!
(Completed)
It is here that to attract the buyer, credit system comes into the dealings and the entire US economy was booming due to the credit made available to Americans. The market forces decided what was to be produced and to what an extent, besides the credit facilities stabilized the demands for these products.
Now, the Republicans are the most stubborn supporters of these capitalist policies. The most of Republican party has top leaders of businesses, who are top CEO of top Multinationals, as their members. While the democrats have little flexible approach to these issues.
The problem here now is the Economic Package of $700 Billion, is stuck. The Republicans will not support it as it is against their ideology, while the Democrats will support it, but they are out of the power centre at the moment. Hence the Bush Package will face tremendous opposition and even if the Bill passes in both the Houses, Republicans could work hard to fail such a bail out plan from nearing success. They might put forward arguments like the misuse of tax payers' money, but where these tax payers' money and concern for it goes when the question arises regarding the banks going bankrupt. What about the safety for investors? Why were no precasutions were taken when the sub prime scandle was detected ? Why were tax benefits were allowed in the first place to those MNCs who were exporting jobs outside the America ?
The issue of tax payers money has no role to play in widely hypocritic country like USA, in which when you say something, the meaning is something else, while the target audience is somewhere else and benefits some where else. USA democracy is no different from Indian mobocracy. Though we Indians will accept it, while if you say this to any American he will show you how arrogant he is and to what extent he could go to refute you. But for once it is assumed that it is not the case then why fewer and fewer people benefit from Govt policies and why large number of people still work for their bread. The scenario is not different from India.
Bush Administration is working hard to avoid the repeat of what had happened in the great depression of 1930, where the Govt. at that time just allowed all the banks to register their bankruptcy and such banks crossed into thousands. These bank had no liquidity and that caused the great depression to go on for 9 long years. Had there been a solution as mooted by Bush, in place, banks could have been helped to avoid the liquidity crisis and there might have been chances that the great depression might have had ended earlier than the beginning of the second world war.
It finished every American and destroyed every American Dream. Thanks to Adolf Hitler who initiated war against the Europe and in particular the UK and became to casue the starting of second world war, US economy started to role during the second world war as Americans had emerged as the largest suppliers of Arms and Ammunition to allied forces. The war fuelled the depressed economy into one of the most vibrant economies of the world at that time and it remained so for nearly six decades.
Is it Iran this time ? Or Pakistan ? or North Korea ?
There may be few takers for the Bush Administration plan for $700 Billion package but that's what perhaps he was expected to do. Remember that Bush Administration had little choice except this bail out plan. And also remember he is a Republican and Republicans are most conservative about the identity of USA as the parent country following the capitalist form of Govt and prospering. They have been supporting this country to be absolutely CAPITALISTS. The Democrats have a little different ideology. They are of the view that they need not be that stubborn on any of the issues relating to the national interests. That is perhaps the reason for the Republicans to oppose the Bush package and inversely the democrats are supporting what Republicans should have been doing.
The seriousness of the crisis in which the USA is at the moment can be gauged from the fact that the most Conservative party, headed by Mr. Bush has mooted a $700 Billion package. As written in the previous write up, it is perhaps for the first time that such a move which could be termed as the direct Govt interference in the USA economy.
The package is directly and indirectly pump the said money into the US economy. It may be buying of assets of those bankrupt investment banks as well as allowing tax concessions to those affected or many other ways which will be asked to Administration of Mr.Bush. But considering all those consequences as analysed in my previous write ups, this package is an improvement over mistake committed by the US administration in 1930, when it had become silent spectator and left the entire US economy and economies of world in suspended animation for another 9 years. Bush is perhaps trying to avoid the same scene happening in 2008.
But how can you refuse to agree with me that the fall in wall street had made Karl Marx happy. he must have been telling to himself that he had envisaged such an outrage world over and had warned the humankind for such events happening in future. But like the products which they sell comes along with attractive packagiing materials, Capitalism mesmerized the world with the development and prosperity to all. All the gains and positive sides were very cleverly highlighted.
For all these years it had been an open policy to call communist countries an Evil Empire, especially the then USSR. One can not forget that famous speech of Mr. Ronald Reagan, when he was advocating his ambitious Star Wars programme. But as far as it is known to the world, that when the USSR fell, no common men on the streets of New York lost their money in stock market or real estate or anything that was connected with bread and butter of a man in Mumbai to Hawaii to Perth to Dubai. There was no share market collapse, not a single investor had lost money the way the people have lost their money now. The world Governments are doing overtime to find ways to tide over this crisis. The most conservative Governments of Europe are readying to start interfering with the economic activities, presumed to be one of most unholiestic act of any capitalist country. European Govt have already pledged huge sum of money for their Banks, whether commercial or investment, to steer off from this crisis.
Today the scene is that everybody on this earth has lost something due to the American recession. It was not enough for the corporates to loot the gullible American citizens, they under the agies of globalization had started looting the world population as a whole. They had reached a stage where they can not further loot the people and then fell.
Imagine, the dollar should have become weak due to recession in America, the world over. Even with the Bush Administration going gunge ho, about the $700 Billion salvage package, the Rupee has been seeing a new low everyday and not the dollar. Money for the sub-prime loss has already been recovered with the large scale oil price speculation. Large funds from all over the world had already been swept by the speculators who are managing this show. Not satisfied with the already on the knees the investors world over, this new drama of investment banking bankruptcy has started. We as Indians will have to be silent spectators, while all our cloths from our body are taken away.
The rising dollar, despite the sub-prime crisis and consequent American rescue act, creates a doubt of utter market manipulation. This is not free market economy. With rising dollar, the demand for oil will go down further the world over. This will make the Americans to buy oil at cheaper rate. Understanding this nitty-gritty requires in depth knowledge and information and also the source as to who is handling this and in perfect co-ordination with the US interest.
In short the capitalist system has failed as that of communist system. Both the systems had chances of failure, which were overlooked by its over-zealous followers. There is one more such system which is waiting to be in line of the two ! The Chinese mix of capitalism, communism or dictatorship. Oh ! what a confusion ! It will continue till the citizens find its benefits and are not exploited the way other two systems exploited its own civilians and failed. Dishonesty and misuse of power by those who had it, crossed all levels and such a scenario was always in making.
With every passing day, Karl Marx smile is widening and perhaps after years of wait, finally his soul would be happy.
Considering the Indian side of this crisis perhaps our Finance Minister has no idea about the extent to which the Indian economy is dependent on Global markets and how far the India Inc. could get affected due to this meltdown in USA, as at the time of booming share market he was not letting any opportunity go to claim the credit for making the country's economy vibrant, is not accessible these days. Perhaps sitting with our home minister Mr. Shivraj Patil, who is trouble following Delhi serial blasts.
It is urgently required that Indian Government implement the policy of creating and building national base for capital, required for the development. We must forget the old days of cheaper capital coming to our country at all. Govt must pool all its resources and support the India Inc. to get cheaper capital and if required should bear the cost difference in rates. This should give momentum to slowed down developmental work. It is highly expected that the developmental work including the infrastructure will require huge capital.
One thing we are assured of so far is, our banks have not gone kaput, like that of American and European banks. We need to consolidate with this from now onwards. RBI should reduce the CRR further to make available the idle cash for the developmental area. Mr. Finance Minister and the team of so called economists with this Govt must ensure that the funds so made available by RBI by cutting CRR and other such measures reach the infrastructure projects or such huge projects such as electricity or dams. This will fuel the domestic market and a powerful shock absorbers can be created within the country to guard against tremors coming from the west.
If and when the US economy picks up steam, Indian economy will be ready to accept the investments coming from US a7 Europe.
This is not as simple as it seems to be and the way I have written. Economies have many complex issues to tackle and contentious issues to sort out. But the bottom lines always remain the same. The solution to our problem always lies with us and not the neighbour. Same way Indian economic woes could worsen, if the our Finance Minister waits for the US treasury to announce similar package to salvage Indian economy. HE must realize that Capitalist ideology has failed and he must adopt something a mixture of everything....like the Chinese are doing. They themselves, perhaps do not know what ideology they are following....except for the communists in India, who still follow communist ideology of 19Th century......KARL IS STILL SMILING.....!!!!!!
(Completed)
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4 comments:
The investors don't seem to be rejoicing or feeling safe after the $700 billion bailout. Go figure.
quite analytical.
the us economy is in the dumps now.
As expressed earlier, the capitalist ideology would do all that is required to protect their ego and go beating around the bush saying that the Govt. has no role to play, what's happening around the world repeats and confirms what was said from this platform.
All the Central Banks in Europe have finalised plans to infuse the funds in the economy to sooth the liquidity crunch. That is the short term immediate solutions. The British Govt. has already assured that the deposits of the people in banks are safe and it guarantees its safety. All other European Govt. are following the suit. The US Govt. will need to follow the same policies of creating and maintaining trust of the business community and the people at large. That's its primary duty at the moment. Perhaps $700 Billion package is not enough at the moment but it could help to break the vicious cycle at the moment.
Share markets all over the world are negative for the reasons of their own. The demand for the industrial products have gone down and people are afraid at the moment to spend their earnings. And so is the production in industrial giants have also affected.
They will recover at their own time AND THEY WILL. Slowly and steadily the people, who are quite afraid now, will realize the change in little long and they will come back to market.
After unimaginable losses in the markets all over the world, why do you refuse to consider that the $700 billion bailout might have been ill-advised, if not grossly stupid? Instead of assuming that it was not enough please consider the consequences of injecting such a huge amount of money.
I was writing a long explanation, but it would get too confusing. So all I will say is that the government needs to bring TRUST back to the market. There is no trust and therefore no lending. You can't lend if you don't know whether the borrower is capable of paying it back. Throwing money at the problem is like giving drugs to a drug-addict.
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