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The Great Depression II Survival Strategies

Economics / Economic Depression Feb 19, 2009 - 05:04 AM GMT

By: Submissions

Economics Diamond Rated - Best Financial Markets Analysis ArticleDr. Raju M. Mathew wrotes: This is the Great Depression II - The crisis that we are now facing can rightly be called The Great Depression II of 2009 . And it is several times severe than the Great Depression I of 1929. It is not mere a financial meltdown; not mere a credit crisis. It is not a recession to disappear within two years. The dimensions and intensities of the Great Depression II are quite different from the early one. Who had brought out the present crisis and where had gone all the money or credits that were available before a few months back, are the two questions that the general public is asking?


Who has brought it?

Almost all banks had been lending five to ten times more than what they had, by the principle of 80/20 or even 10/90 in the age of electronic cash and e-banking or e-commerce, without bothering the repayment capacities of the borrowers that ultimately resulted in the credit crisis and crushing of the stock markets. Unfair business practices and high level frauds and corruptions had made every thing very complex.

The heavy expenditure on armaments incurred by almost all nations and terrorist organizations had aggravated the crisis. By siphoning off billions from the accounts of the big corporations and millions of individuals, especially the elderly, the terrorist organizations made money for their operations. Governments borrowed heavily to meet their defense and other expenditures. The undue growth of the defense industries is possible only by jeopardizing all the other industries and sectors. It is one of the major contributing factors for the present global crisis.

Terrorism and the Poor

Every terrorist attack creates new demand for sophisticated weapons and almost all governments are forced to set apart a sizable amount for defense that ultimately affects the weaker section of the population. There exists a nexus between the defense industries and terrorist organizations. The only beneficiary of terrorism is the arms traders and the defense industry. Whatever may be the slogans and causes, terrorism adds miseries of the common people and its causes are lost ultimately. For terrorism, governments have to cut both developmental activities and welfare schemes by spending more on weapons. Neither the killers nor their victims gain anything but the weapon traders. Terrorism makes governments more tough and oppressive.

Fast to Slow

After high and fast growth and booms now it is the turn of gloom, recession and depression. There is a limit for speed and growth. Development based on aggressive marketing, consumerism and globalization, ignoring the vast majority, cannot go on very long. Recessions and depressions are self correcting mechanism for the maladies of a society that strives for unlimited growth at a high speed. No human being or economy can run fast for very long. Now, Information Technology and the Modern Management Techniques do not have any answer for the present crisis. So also are the cases with IMF, WTO, ADB and the World Bank that are on the verge of collapse. These are the basic lessons that the Great Depression II teaches us.

Everybody has been running fast. Fast life style has become the rule, As a result, nobody has any time even to dream, imagine, think and learn. Knowledge and scholarship have been pushed back for data and information; learning has been reduced into an exercise for scoring of higher grades or marks; reading has been neglected for the sake of scanning and extracting from the internet. Critical thinking and creative ideas or works have been denigrated; superfluous analysis and mimicries have been dominated in the place of sound theories and strategies.

In the fast life, even young men and women could not find time for romance and love making other than fast sex, that too without the botheration of child birth. The greatest causality is the family life, the cordial relationships between wife and husband and between parents and children. Even in religion, faith in God and love of human beings are pushed back by the harsh and rigorous practices and rigid interpretations, without any element of mercy and forgiveness. Materialism dominates over spirituality even in religion. After a period of fast life, everybody has to go back to slow life.

The Basic Reasons

The value and importance of rural life, especially agriculture are withered away for the over projection of the glory of urban life and the service sector. But cities could not survive without farming and rural sector. Urban sector is depending too much on the rural sector rather than the villages relaying on cities, because most of the villages could be easily made self sufficient with regard to the basic necessities of life.

Service sector of an economy could not flourish when its agricultural or industrial sectors are weak. Information Technology and Modern Management Techniques could not survive in the age of crisis; they are only catalysts for boom when the economy is sound and healthy; they are the catalysts of doom or bust when the economy is weak and sick. The inter-sector imbalances with regard to growth and wage or salary structures and the striking disparities with regard to the standard of living of the people of the various sectors are the basic reason for the present global crisis.

How Long It Will Be?

The Great Depression II, now in its first phase, would continue for a minimum period of five years, sometimes ten years, in a more rigorous way. It brings about a crisis of faith in technology, money power, managerial talents and the entire banking and insurance sector, besides the money and stock and share markets and the credit system. The highly acclaimed economic and business wisdoms and formulas are crushed and shattered. A good majority of the Business Schools and Management Consultancy and Software Companies will be wiped out. A sense of helplessness and even meaninglessness are to dominate in the thinking and behavior of not only of the common people but even the professionals and top executives. Everybody, including the top billionaires and technocrats and the most trusted business houses, has become vulnerable.

Gone are the Ages

We have to accept, though painful, that the age of consumerism and the dominance of the service sector over the agriculture and industrial sectors are over. So also is the case with cities over the villages. The age of malls and supermarkets and multi-billion dollar advertisements and promotional activities are over. The unreasonably over-salaried CEOs and other executives have become an extinct species mainly for their greed, corruption and illegitimate high bonuses coupled with their inefficiency and lack of social commitments. The age of pomp and extravagancy is finished. The simple reason is that humanity could not afford consumerism any longer. Gone are the ages of the Great Business and Financial Gurus and Advisers, because of their visions and foresights.

Who Could Save Us?

Men of ideas, vision, scholarship, theories and strategies and multi-disciplinary backgrounds could alone solve the present crisis. The only agency to deal with The Great Depression II with long term strategies and policies is the Governments that must be strong enough and duly functioning. No single country or government could tackle it; instead, global efforts and strategies are required. No savior will come to save us; we must be our own saviors. The UN must be made strong enough to act globally for dealing with the Great Depression II, chalking out the area of international cooperation. It must act on a war footing

Threat to Peace and Democracy

History teaches us that every major crisis or revolution is followed by dictatorship or war. Fascism was the offspring of the Great Depression I of 1929. Crisis in the Old France led to the French Revolution; October Revolution was the consequence of the socio-economic crisis in the Czarist Russia. Unless the present crisis are dealt immediately, millions of hard hit and unemployed people, besides the angry debtors will march towards the streets and the capitals and capture the power that invariably leads to dictatorship and then the war. It will also lead to clashes between people of different regions or interest groups and ultimately civil wars. Mass burglary or looting will become the rule and billions will die out of hunger, epidemics and civil wars. The Great Depression II shall be the greatest threat to peace, democracy and rule of law.

Time to Act

Now we are in the early stage of the Great Depression II and as such the people and the governments are in a riddle or puzzle to grasp the crisis. In the next stage they will be in an absolute shock to realize the losses and damages that they have to encounter; over 80 per cent of the jobs will be wiped out; a good majority of trade and business people will turn bankrupts. . At this stage, so many people will commit suicide or reach on the verge of mental brake down. This is the stage of total crisis of faith; people will loose faith in every thing and they will be ready to anything. This is the most dangerous situation that will lead to revolutions, mass crimes and lootings and even civil war. In order to avoid all these situations, we have to act urgently; the governments, international agencies, governmental and non-governmental and world religions must work together to deal with it in order to avoid greater miseries.

Immediate Relief Measures

The UN must set up The Great Depress II Relief Fund to help millions of people who lost their job and income consequent on the Great Depression II. UN must make all major religions and other organizations, besides all countries, to get involved in these tasks. The Fund shall be operated in such a way that its benefits must reach to all the needy at the right time. The UN and various international agencies must be ready to take some drastic steps including cutting the salary and other benefits to the extent of 30 to 40 per cent of all its employees, including the top executives and also limiting other expenses.

On the basis of the UN guidelines, all government must come forward to make a salary cut to the extent of a minimum 30 per cent and to put an upper limit for the salary and other perks of all those who are employed, including in the private or corporate sectors. Actors, singers, players, models and people in the show business must be ready to cut their remuneration by taking into account the global crisis. Nobody should be allowed to make overnight fortunes. We have to realize that the undue growth of a particular entity or sector or region or a country must be at the expense of the others and it should dealt as cancerous growth affecting the entire global society.

Cutting the cost of production as well as the cost of living is the only way for survival and growth in the age of The Great Depression II and thereafter. All nations must be ready to cut their defense expenditure to the extent of seventy to eighty per cent and a joint global strategy against terrorism must be launched as no nation can be made free from it. Other wise, the crisis will prolong and millions will dies out of hunger.

Ineffectiveness of the Keynesian Strategies

The Great Depression II could not be dealt with a set of conventional monetary and fiscal policies as have been suggested by the Keynesians or the Neo-Keynesians that have become totally ineffective for their over-doze or over-saturation. There is a limit for technology and management techniques, including marketing in this regard. Now what are required are a massive behavioral change and a new way of life, freeing from consumerism and fast life style, a byproduct of materialism, on the part of the society as a whole. Greater cooperation and mutual support between nations, even at global level, are the only means for survival and growth.

Re-creation and Re-learning

The Great Depression II brings life slow. It is the time for re-creation and re-learning and acquiring new knowledge and skills. It is the right time for creative works and above all reinventing the basic human, family and religious values coupled with humanism, spirituality and cooperation. It is the time for baby booms. It is the time for the re-birth of rural and farming sector. People find new meaning in agriculture and country life. Now, it is unproductive to make heavy investments in cities and high technologies and the service sector. Religions have to play a very important positive role by developing mutual respect and cooperation rather than rivalry and aggressive fundamentalism that bring Terrorism, as a by-product.

Long Term Strategies

The best long term strategy to deal with The Great Depression II is to invest heavily on the rural and the farming sector and develop their infrastructures along with making heavy investment in education, especially basic science and engineering, social sciences and humanities. Learning must be encouraged by developing libraries and encouraging the overall reading habits of the people. Cost effective Open Learning-- Open Schools and Open Universities or Virtual Universities, even in Science and Technology must be set up or developed to make education reach in the hands of millions all over the world.

These strategies are equally applicable to both the East and West, developing and developed nations, including GCC countries. Nobody, including the young and dynamic American President, Barrack Obama, has any magic stick to deal with The Great Depression II, other than following the above noted term strategies and policies. It is high time to realize that no affluent nation can survive by keeping a large number of nations or people poor and depressed and selling arms and defense equipments and following consumerism. It is high time to realize that terrorism and religious fundamentalism add miseries and sufferings of the humanity and bring hell on earth, for they are the tools in the hands of Satan who wants to bury down the peace and happiness of the humanity.

From Dooms to Booms

When implementing the above policies and strategies, people will come out with savings, innovative ideas, plans and strategies and to put them in agriculture, industry and service sectors within three years. All these will push up economic activities, including global trade and business. International cooperation between developed and developing or underdeveloped societies and nations would emerge so as to ensure a minimum development and standard of living for all. The people, especially the young, will dictate their terms of peace and co-existence over the Governments, Religions, Political Parties and the Terrorist Organizations. There is no doubt, the humanity would withstand the crisis and enter in the New Age of Peace and Development for the bold and honest efforts of the youth. This is not the end of the world, but the beginning of a New Dawn for the young, provided they are ready to act for the well being of the entire global society without sidetracking anybody.

Dr. Raju M. Mathew can be contacted by e-mail: rajoocyber@yahoo.com.

Some of his other works are given in his site: www.ifkt.net

Dr. Raju M. Mathew is a strategist and theoretician with strong background in Economics, Cybernetics, Education and Information Science & Technology with long years of experience in teaching and research, including directing a major research project and supervising ten doctoral works. The Netherlands based FID nominated him as one of the twelve international members for its Committee on Research on Theoretical Basis of Information Science in 1983.

Dr. Mathew formulated two basic theories of knowledge consumption and knowledge production that got published jointly by the FID and the USSR Academy of Sciences in 1985 in the work, ‘Theoretical Problems of Informatics’. Now these theories are known in his name and have become the field for doctoral research.

In 2005, Prof. Mathew proposed Knowmatics and Knowledge Technology as the two Post-Information Technology disciplines for processing and handling knowledge so as to develop knowledge industries. He also set up the International Forum for Knowmatics & Knowledge Technology (IFKT). Some of his works are available in the site: www.ifkt.net

Dr. Mathew is on a mission of making the world aware of the impacts and intensities of the present crisis, the Great Depression II of 2009 and persuading the governments and international agencies to formulate correct strategies and policies and implement them urgently to deal with it and make an early recovery from it, so as to save the lives of millions, especially the young.

© 2009 Copyright Dr. Raju M. Mathew - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

drrajumathew
06 Nov 12, 00:00
FROM RECESSION TO THE GREAT DEPRESSION II

THE GREAT DEPRESSION II

FROM RCESSION LASTING TILL 2025

DR. RAJU M. MATHEW

The Great Global Depression II

Starting as a financial meltdown in 2009 with some banks and financial institutions, the crisis had spread to the housing and the entire finance sector and grown into the Great Depression extending to almost all European and industrialized countries, including G20 Countries. Rulers and the Nobel Laureates in Economics and Management Gurus, besides IMF, the World Bank and the World Economic Forum assured that it was a short term business cycle phenomena or Recession and it could be tied over with some Stimulus Packages and support of the BRIC countries.

However, the world also realized the ineffectiveness of the over-dozed Keynesian remedies to deal with ‘stimulus resistant consumerism with easy money or credit cards and earning quick money without investment, innovation, entrepreneurship and competitiveness. After the initial insulation effect, Brazil and China are in the grip of the Depression and India and Russia are on the verge of the Depression fueled with rising Corruptions and Corporatism. No doubt, whatever they call the crisis, it has emerged as The Great Global Depression 2009 lasting at least up to 2025.

It cannot be solved with ‘The Keynesian Remedies’ of deficit financing and public spending or monetary or fiscal measures of a handful of countries. It needs Global Solutions involving all Nations or Peoples and Sectors, ensuring Sector and Regional Balances, ensuring Food, Dignity and Knowledge for the entire humanity.

I have been telling the world that we need a different global strategy to deal with the Crisis and save the Humanity, starting from Feb. 2009 with my first work, (www.marketoracle.co.uk/Article8978.html) and over a dozen works, including Harvard blogs(blogs.hbr.org/...business.../are-business-schools-to-blame.html) and the last one, ‘The Coming of the Violent Revolutions ‘ (www.marketoracle.co.uk/Article32380.html).

Nobel Prize in Economics

America is the land of the Nobel Prize Winners in Economics for their works on the Computation Economic Data and making Mathematical Modeling. America is the land of the Brain and Heart of Internet. It is the Champions of High Tech, Globalization, Credit or Smart Card, Internet Banking and e-Commerce. America is the land of the Top Business Schools, including Harvard, and Management Gurus. America is the land of the Powerful President, the Global Policeman.

America can destroy any nation The UN, IMF and the World Bank are programmed to dance to the tune of the American President whose shadow spread across the Europe and some parts of Asia. But America too is the Land of the Global Economic Crisis, capable of bringing out the Great Depression II lasting another ten more years and making at least One Generation ‘Lost’ forever and carry out the pain on the next Generation. Nobody has any solution for the Crisis and increasing sufferings of over 80% of the Humanity.

Globalization of Crisis

The American Internet, the American Education, the American Models of Globalization, Industrialization, Consumerism and Corporatism and the American Dream or Wisdom exported to almost all nations through its Economists and Management Gurus and Business Schools or the World Bank have successfully Globalized its Economic Crisis and Blunders.• Even the new born children in the remotest Asian or African village are not made free from the Global Economic Crisis, starting just as a ‘financial meltdown’ and growing as ‘The Great Depression II’ extending at least till 2025. America has already killed ‘Capitalism’ and ‘Democracy’ though it claims as the Paradise of ‘Capitalism’ and ‘Democracy.’

The Price of Information Technology

Information Technology, built upon linear and one-dimensional ‘data structure’, has reduced everything into bits of ‘0’s or ‘1’s, in spite of its marvelous speed and data manipulation capabilities, including making projections, forecasting and models or simulations. IT has taken away the wisdom and thinking abilities of the American economists, including the Nobel Prize Winners, Management Experts, Financial Analysts and Decision Preparing Teams or Think Tanks who missed ‘Knowledge’ for Data and Information. They fooled themselves with some data or presentations, kept in their laptops , thinking that the Economy or even Economics can be reduced into a set of data or equations or formulas and they have solutions for all the ills of the American or the World Economy. Like data structure, their minds too have become linear and one-dimensional, unable to deal with non-linear and multi-dimensional economic issues. This is the price of Data at the cost of Wisdom and Knowledge which are the ‘out of range’ or reach of Information Technology. The collapse of the American education system has already been started.

Death of Capitalism and Democracy

For the omnipotent ‘Corporatism, ‘Consumerism’, Aggressive Marketing’ and ever pervading Information Technology, Capitalism and Democracy are dead in America and also the other parts of the world. Concentration of wealth and power in the hands of the few, even in the form of highly powerful corporate houses, leads to the death of democracy, turning the American people into mere pseudo citizens or corporate slaves.

India too is under the grip of Corporatism under the Reliance of Ambanis. Almost all political leaders, including the leftists, and religious leaders, especially the two highly organized religions like Islam and Christianity, are under the spell of Corporatism. They lost their direction and commitment to the suffering millions.

Consumerism dried away the saving, investment, innovative, entrepreneurial and competitive capabilities of the common people that lead to the death of Capitalism. Without saving, investment, innovation, competition and entrepreneurship there is no capitalism.

Poverty and Globalization

Poverty and backwardness of the majority of the nations and richness and affluence of a handful of nations are as old as the humanity, as depicted in the Bible, the Quran, the Mythology and the Classics or even the Modern Literature.• In such olden days, poverty and backwardness was only an issue of the victims and not of others; the rich and the affluent nations were the ‘Chosen Ones of the God’ and the rest the ‘Cursed Ones’. The chosen ones determined the fate of the Humanity.• Thanks to Globalization and Information Communication Technology Revolution, every nation or people has become ‘The Chosen One’ capable of determining the balance or imbalance or even the fate of the Global Economy.

Economy and Data Analysis

For the Nobel Laureates in Economics and the other Economists, Financial Analysts and Management Gurus, all economic and financial problems and activities can be reduced into a set of computer-generated and manipulated Data, Formulas, Equations and Models.• For them, an economy is so simple that can be brought under Mathematical or Statistical Analysis, a blunder committed by the then USSR or East European Planners and Economists. Invariably, their approach is one-dimensional, linear and static within which nobody can bring an Economy, more correctly Political Economy.

A Political Economy is Dynamic, Non-Linear, Multi-Dimensional and Extremely Complex, especially when Globalization is the rule. Any economy, even if it is big or powerful, can never dictate the Global Economy, for it is just a part of the Global Economy and not the whole. That is why; the American or the Chinese rulers or planners with their sophisticated Data and Analytical Techniques or Stimulus Packages and the familiar Micro or Macro Economics cannot save their own economies.• In fact they are aggravating and prolonging the Crisis with their strategies leading to ‘Inter-Sector and Inter-Regional Imbalances’, the root cause of the Crisis to emerge as the Great Depression II, lasting at least to 2025.

The Growing Inter-Sector and Inter-Regional Imbalances

Economists and policy makers of the UN, IMF, World Bank and also of the National Governments, besides the World Economic Forum and think tanks think in terms of one or a handful of economies or peoples without bothering the World Economy and the Humanity as a whole or at lest over 80% of the world population.

Both Islam and Christianity are not free from such sins, for they consider Abraham and his Tribe alone are ‘the Chosen’ to conquer the ‘Promised Land’ and all other peoples or races or tribes as ‘Cursed’ to be annihilated. The ideology of chosen people is the basis of Capitalism, Fascism and Communism.

The policies and strategies of these ‘Data Addicted’ and ‘IT Polluted’ rulers and experts lead to the over –dominance of the ‘Service or Tertiary Sector’ over Agriculture and Industrial Sectors; the dominance of some regions or nations over others; and the dominance of cities over villages or rural areas.• This has resulted in the total imbalance and lop sided growth of the World Economy. We are heading towards great famine and severe shortage of food or farm products all over the world, capable of wiping out at least 20% of the world population. As long as such imbalances exist, the Crisis will be there and emerge as The Great Depression II and last at least 2025.

Set Right the Imbalances

The only strategy for the survival of the Humanity and freeing from the grip of ‘The Great Depression II’ is set right the Inter-Sector and Inter-Regional Imbalances. Without developing Agriculture, Rural and Farming Sectors, the humanity cannot survive; without them, no industrial or service sector growth is possible. In order to escape from the ‘Great Famine’ and ‘Acute Shortage Drinking Water’, a Five Fold Investment for Rural and Farming Sectors, including Infrastructure Development are required globally so as to generate income and employment to the billions.

The World Economy cannot afford or sustain the development of a handful of countries, keeping the rest under hunger, ignorance and exploitation or poverty, that are the basis of religious fundamentalism and terrorism. Men or women without hope or dream or material well being turn towards terror and religious fundamentalism without Spirituality and Humanism, claiming a particular religion or sector interpretation as the only ‘Right or ‘Chosen’ one. America or the Western Europe cannot flourish or survive keeping millions in Asia or Africa under hunger, ignorance and oppression.

No force on earth can dismantle Globalization and the World Political Economy and go back to the Age of the Warring Primitive Tribes of Abraham or Moses or their ideologies of ‘The Chosen People’ and ‘The Promised Land’. Everybody is chosen and entitled for ‘Food. Dignity and Knowledge’ that empower the entire humanity and pave the way for a New Global Social Order without Recessions or Depressions.


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