Saving America From Further Crisis In The Age Of The Great Depression II
Economics / Economic Depression Mar 01, 2009 - 08:15 AMBy: Submissions
Dr. Raju M. Mathew writes:
The Great Depression II
America is in the grip of the Great Depression II of 2009. It is in crisis for a minimum period of five years. Its economy is weak and sick. It is not at all competitive for its cost of production is the highest as its cost of living. The American thinks tanks and lobbyists of big corporations, especially of the defense industry and arm traders have made everything complex without any simple solution with their wrong projections and ill-advices.
Under this back ground, President Barack Obama launched out a bailout plan with $ 1.75 trillion deficit budget equaling 12.3 per cent of the GDP. This is a dangerous game with the instinct of live or die. President Obama is trading with the future, making the future generations the greatest debtors on earth. America may not have much option.
The Greatest Threat
The present crisis is the result of the wrong policies of its former rulers, associated with its global ambitions and the so called “American Dream” coupled with the reign of consumerism. The affluent style of living of the American people for the last 25 years without taking into account their actual assets and earning ; unreal projection of the value of the assets and earnings and too much reliance on credit.
Consumerism has emerged as the great threat to the American economy and its democracy. Nobody could escape from the all pervading influences of the aggressive marketing and the unholy alliances between the trading community and the banking sector for making people to buy anything on credit and making everybody debtors. Saving has become almost impossible for the middle class, the real backbone of the American economy, thanks to heavy taxation. Aggressive marketing brought out a highly materialistic consumer society with too much dependence on credit. Consumerism buried down the basic human values along with wisdom and knowledge projecting data and information on the excuse of fast life style.
Death of Economics
In America there exists confusion between market economy and marketing society. A market economy has its own strength and beauty. Its strength is its inbuilt self correcting mechanism because everything is regulated on the forces of supply and demand reinforced by the rational behavior of the consumers and the perfect information about the market. Its beauty is freedom both for the consumers and producers and innovations.
But in the over dominance of Modern Management Techniques, Computer Simulated Modeling and Statistical Forecasts, besides fabricated data or information, Political Economy or Science of Economics has almost pushed back and become unfashionable. As a result, America missed the wisdom of Economists. Market Economy has been reduced into mere marketing and then later associated with credit centered with e-banking and e-commerce. A new class of greedy and money laundering executives have emerged to grab all the fruits of the economy pushing back the middle class to the bottom killing their purchasing power and wiping out the habit of saving or thrift.
The Waynad Syndrome
However, there is tendency for the people to continue the familiar rich and affluent life style, that had been followed in normal times, even during the time of crisis at any cost. People may continue the same extravagance even by borrowing from all sources and become more and more crisis ridden. This phenomenon can be called the Wyanad Syndrome.
Wynad was a highly fertile hilly area in Kerala in India, famous for spices, pepper, cardamom and coffee. At the height of its prosperity, the people as whole earned several times higher than the rest in Kerala. That made them to adopt an affluent life style without any botheration of saving or thrift. Suddenly, thanks to some natural calamity and competition from other countries, almost all prosperity of Waynad had been wiped out. However, people could not change their life style and even the bailout packages of the Government were spent for continuing their old life style. As a result, a large majority of them had turned bankrupts and some of them even committed suicide. This tendency is called Waynad Syndrome, an inability of a people to change the life style according to the changing conditions especially of adverse situations.
Saving America
Unless America protects itself from the dirty clutches of consumerism and too much dependence on credit for consumer items, the big bailout packages of President Obama, based on a very huge deficit budget, would become counterproductive or self-destructive. In order to survive and grow the Americans must adapt a different life style, a simple way of life developing the habit of saving and investing, besides making innovations. The newly pumping money must be utilized for survival and productive purposes. Otherwise, an artificial demand would be created resulting in inflation to make the lives of the common people more miserable. Without saving and investing no economy could survive. America must concentrate on cutting the cost of production as well as the cost of living for its survival and growth.
About the Author
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. Dr. Raju M. Mathew can be contacted by e-mail: rajoocyber@yahoo.com.
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