Finance in the 21st Century
From Financial Meltdown to Global Depression?
Nouriel Roubini
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NEW YORK – The rich world’s financial system is headed towards meltdown. Stock markets have been falling most days, money markets and credit markets have shut down as their interest-rate spreads skyrocket, and it is still too early to tell whether the raft of measures adopted by the United States and Europe will stem the bleeding on a sustained basis.
A generalized run on the banking system has been a source of fear for the first time in seven decades, while the shadow banking system – broker-dealers, non-bank mortgage lenders, structured investment vehicles and conduits, hedge funds, money market funds, and private equity firms – are at risk of a run on their short-term liabilities.
On the real economic side, all the advanced economies – representing 55% of global GDP – entered a recession even before the massive financial shocks that started in late summer. So we now have recession, a severe financial crisis, and a severe banking crisis in the advanced economies.
Emerging markets were initially tied to this distress only when foreign investors began pulling out their money. Then panic spread to credit markets, money markets, and currency markets, highlighting the vulnerabilities of many developing countries’ financial systems and corporate sectors, which had experienced credit booms and had borrowed short and in foreign currencies. Countries with large current-account deficits and/or large fiscal deficits and with large short-term foreign currency liabilities have been the most fragile. But even the better-performing ones – like Brazil, Russia, India, and China – are now at risk of a hard landing. Many emerging markets are now at risk of a severe financial crisis.
The crisis was caused by the largest leveraged asset bubble and credit bubble in history. Leveraging and bubbles were not limited to America’s housing market, but also characterized housing markets in other countries. Moreover, beyond the housing market, excessive borrowing by financial institutions and some segments of the corporate and public sectors occurred in many economies. As a result, a housing bubble, a mortgage bubble, an equity bubble, a bond bubble, a credit bubble, a commodity bubble, a private equity bubble, and a hedge funds bubble are all now bursting simultaneously.
The delusion that economic contraction in the US and other advanced economies would be short and shallow – a V-shaped six-month recession – has been replaced by certainty that this will be a long and protracted U-shaped recession, possibly lasting at least two years in the US and close to two years in most of the rest of the world. And, given the rising risk of a global systemic financial meltdown, the prospect of a decade-long L-shaped recession – like the one experienced by Japan after the collapse of its real estate and equity bubble – cannot be ruled out.
Indeed, the growing disconnect between increasingly aggressive policy actions and strains in the financial market is scary. When Bear Stearns’ creditors were bailed out to the tune of $30 billion in March, the rally in equity, money, and credit markets lasted eight weeks. When the US Treasury announced a bailout of mortgage giants Fannie Mae and Freddie Mac in July, the rally lasted just four weeks. When the $200 billion rescue of these firms was undertaken and their $6 trillion in liabilities taken over by the US government, the rally lasted one day.
Until the recent US and European measures were announced, there were no rallies at all. When AIG was bailed out to the tune of $85 billion, the market fell 5%. Then, when the $700 billion US rescue package was approved, markets fell another 7% in two days. As authorities in the US and abroad took ever more radical policy steps from October 6-9, stock, credit, and money markets fell further, day after day.
Do the recent measures go far enough? When policy actions don’t provide real relief to market participants, you know that you are one step away from a systemic collapse of the financial and corporate sectors. A vicious circle of deleveraging, plummeting asset prices, and margin calls is underway.
So we cannot rule out a systemic failure and global depression. As we have seen in recent days, it will take a big change in economic policy and very radical, coordinated action among all advanced and emerging-market economies to avoid disaster. This includes:
• another rapid round of interest-rate cuts of at least 150 basis points on average globally;
• a temporary blanket guarantee of all deposits while insolvent financial institutions that must be shut down are distinguished from distressed but solvent institutions that must be partially nationalized and given injections of public capital;
• a rapid reduction of insolvent households’ debt burden, preceded by a temporary freeze on all foreclosures;
• massive and unlimited provision of liquidity to solvent financial institutions;
• public provision of credit to the solvent parts of the corporate sector in order to avoid a short-term debt refinancing crisis for solvent but illiquid corporations and small businesses;
• a massive direct government fiscal stimulus that includes public works, infrastructure spending, unemployment benefits, tax rebates to lower-income households, and provision of grants to cash-strapped local governments;
• an agreement between creditor countries running current-account surpluses and debtor countries running current-account deficits to maintain an orderly financing of deficits and a recycling of creditors’ surpluses to avoid disorderly adjustment of such imbalances.
Anything short of these radical and coordinated actions may lead to a market crash, a global financial meltdown, and worldwide depression. The measures adopted by the US and Europe are a start. Now they must finish the job.
Nouriel Roubini is Professor of Economics at the Stern School of Business, New York University, and Chairman of RGE Monitor.
Copyright: Project Syndicate, 2008.
www.project-syndicate.org
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rajoocyber 12:30 21 Apr 09
DEATH OF ECONOMICS AND GREAT DSEPRESSION II:
ROLE OF BUSINESS SCHOOLS IN AGGRAVTING
THE GLOBAL CRISIS*
DR. RAJU M. MATHEW
The Present Global Crisis
The world is under a great financial and economic crisis. To almost all finance and management experts it is just a financial meltdown or a credit crisis or at the maximum a recession. But for the economists with strong backgrounds in Economic Theory, Policy and History, who are very limited in numbers, it is the Great Depression II, far more severe than the Great Depression of 1929.
CEOs and MDs
Economics has been denigrated into oblivion in the onslaught of the glittering courses of the Modern Business Schools and their high salaried and bonus earning graduates as CEOs and MDs or top managers, during the time of the just receded Boom, However, the present crisis brings back Economics into the forefront for drafting strategies and policies for making a speedy recovery. In the height of the crisis, as almost all the products of the Business Schools, including Harvard turned like ostrich dipping their heads in the sands. Now they are accused the prime culprits of the present crisis. Now they are treated as dirty as pick-pockets and street pimps for their greed and immorality.
Breach of Trust and Mismanagement
Almost all products of the B- Schools who are elevated to CEOs or MDs of big corporations in the banking, insurance and financial sectors are charged with breach of trust and mismanagement besides eating away the big bonuses and committing money laundry, presenting false and fabricated statements, for their greed and fraud .In their passion for glamour and glitter, they violated the basic principles of management due to their ignorance of the fundamentals of Political Economy, as their knowledge, more correctly information, is in capsule form without any deep understanding of theory, history and strategies.
Political Economy
Political Economy or Economics is as old as the origin of the human societies and also of the nations. Kaudialya, the Indian strategic thinker, in his ‘Arthasatra’ and Machiavelli, the Italian strategist, in his ‘The Prince’ had dealt with Political Economy . The Pharaohs of Egypt had applied basic economic principles in constructing dams and pyramids while employing the Israelites as slaves, besides successfully managing the economy for a very long time. Learning from the Pharaoh, Moses too had applied basic economic principles in levying taxes, waging wars and sharing the loots, including women.
However, Economics as a branch of Science emerged with the publication of Adam Smith’s ‘Wealth of Nations’ that paved the way for the emergence of Capitalism, especially the industrialized western economies. It was J. M. Keynes, a well known British economist, with his General Theory, saved Capitalism from eternal peril during the Great Depression of 1939. F.A. Hayek became the first Nobel laureate in Economics.
The Great Depression
Almost all industrialized economies have been undergone with the phenomena of ‘business cycles’, characterized by high growth, stagnation and recession. Innovative entrepreneurs could make new strides in the growth of Capitalism. However, the Great Depression of 1929 had challenged the very foundation of Capitalism as supply had not created its own demand. It was J. K. Keynes who prescribed the medicine of public spending and deficit financing besides championing the cause of establishing the IMF and the World Bank, gave new foundation for Capitalism.. However, the over dosage of the Keynesian remedies, especially deficit financing and public borrowing, designed for emergencies, have become a regular practice for almost all governments. As a result, they have getting ineffective, just like the regular and over-dosed use of anti-biotic.
New Corporate Culture
After the Second World War, especially during the Cold War period, most of the military technologies, including internet, had been put into civilian applications that gave new impetus to industrialization, networking, globalization and trade-in-services. The Multinational Corporations (MNCs) have emerged with grater influence over almost all governments and their budgets exceeded far ahead of the governments of smaller countries. Information Technology has become the most powerful tool in the hands of the MNCs to control and manage their operations, spreading across several countries.
They have entered in all major services like, banking, finance, insurance, networking and communications, management and consultancy, marketing, retail trade and real estate to have a virtual control over the entire economy and to make quick profit in terms of billions and trillions. A new type of corporate culture has emerged with the motto of making quick profit, high salary and bonuses at any cost. It has created greedy and jealousy CEOs and other corporate heads and managers who thrive with fraud and corruptions besides false and manipulated accounts and statements to deceive the government and the general public.
The Service Sector has started to dictate or dominate all the other sectors, side tracking both Agriculture and Industrial Sectors and thereby upsetting the very basis and balance of an economy. Information Technology has penetrated in all the domains of the service sector, reducing everything into bits and bytes. In the over-emphasis of Information, the worth of Knowledge and Wisdom has withered away.
Death of Economics
Almost all B-Schools rivaled each other for creating and supplying greedy, jealous, manipulating and unscrupulous, high salaried managers and business executives in the age of corporate culture. They challenged the very foundation and wisdoms of Political Economy. In the new age of Information Technology, a new breed of economists with mathematical and statistical tools and computing techniques have dominated the scene and they have denigrated Economics with a set of formulas and equations., that have reduced economics, a minor branch of Mathematics ort Statistics. Economics has been reduced into mere data and information without the backing of any wisdom and knowledge. Thus Economics has lost its purpose and foundation besides its human face and social commitments towards the weak and the poor. As a result, Economics, basically concerned with ‘wealth of nations’, ‘social well being’ ,‘income and employment’ and ‘constitution of liberty’, resource allocation efficiency and optimality’ has become unfashionable in the age of highly fashionable ‘Business Management or Administration’.
Do We Need Business Schools?
The actual contribution of the Business Schools and their graduates in the healthy development of the national as well as the global economy and in the promotion of global trade is a disputed or questionable one. Of course, they have squeezed the entire economy for their own greed and added the misery of the millions, especially of the poor for promoting consumerism, aggressive marketing and credit based purchase of consumer items. They ruined the financial stability of the millions of families, turning them into debtors and wiped out thrift and saving mentality from the society. With their lavish funding, they have even corrupted all the major religions that have become more and more materialistic by promoting consumerism at the cost of spirituality and compassion. It must be highlighted that almost all major business and industrial establishments are built by the real entrepreneurs without qualifications from any of the B-Schools. Now the basic question is do we need the immoral, unethical and greed and fraud- promoting Business Schools and their short and long courses and academic programs.
Re-Inventing Economics
It is high time to make Economics free from the narrow boundaries of a set of mathematical formulas and equations besides the computer generated data and information. It is a crime to reduce economics within the narrow framework of data and information, ignoring Knowledge and Wisdom. Wisdom and Knowledge are our real wealth and they alone save us at the time of crisis and perils. The world needs the visions, wisdom and knowledge of the Political Economists for a fair and ethical global order and society.
.
Universities must come forward to give re-emphasis to the study of Political Economy by attracting the best students and professors so as to develop a holistic view of the working of an economy, inter-dependence of its various sectors and units besides the diverse economies of the world and finally of the global economy.
It is time to critically examine the social value and worth of the mushrooming Business Schools with their long and short term academic programs, including M.B.A and several other gilt-edged diploma courses without any strong basis in Economics. The present global crisis made the world realized that management is not mere making profit and earning high salary and bonus, by exploiting both the workers and customers and cheating the share holders and the governments.
Managers must be made socially committed for the creation of wealth, income and employment and thereby attaining social well being both at national and global levels. They have to plan, organize and getting things done for attaining the set objectives of their firms and also the broader social goals of making a sound and healthy economy. They must be made to follow a set of well defined business ethics and fair practices. Other wise, they become criminals to brake the very foundations of families, enterprises, nations and the entire global economy.
(* This is the sixth series of work by the author on The Great Depression II – the Present Global Crisis. All his other works can be found if a search is made in the internet under ‘Dr. Raju M. Mathew’. )
About the Author
Dr. Raju M. Mathew is an economist, a strategist and theoretician with strong background in Cybernetics, Education and Information Technology with long years of experience in teaching and research, including directing a major research project and supervising ten doctoral works. Dr. Mathew formulated two basic theories of knowledge consumption and knowledge production that got published in 1985 and appeared in several languages. Now these theories are known in his name and have become an area 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 is the founder president of the International Forum for Knowmatics & Knowledge Technology (IFKT). Some of his works are available in the site: www.ifkt.net. Now he is working with the Al Ain University of Science & Technology, Abu Dhabi, UAE.
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 and the poor. Dr. Raju M. Mathew can be contacted by e-mail: rajoocyber@yahoo.com.
rajoocyber 12:30 21 Apr 09
DEATH OF ECONOMICS AND GREAT DSEPRESSION II:
ROLE OF BUSINESS SCHOOLS IN AGGRAVTING
THE GLOBAL CRISIS*
DR. RAJU M. MATHEW
The Present Global Crisis
The world is under a great financial and economic crisis. To almost all finance and management experts it is just a financial meltdown or a credit crisis or at the maximum a recession. But for the economists with strong backgrounds in Economic Theory, Policy and History, who are very limited in numbers, it is the Great Depression II, far more severe than the Great Depression of 1929.
CEOs and MDs
Economics has been denigrated into oblivion in the onslaught of the glittering courses of the Modern Business Schools and their high salaried and bonus earning graduates as CEOs and MDs or top managers, during the time of the just receded Boom, However, the present crisis brings back Economics into the forefront for drafting strategies and policies for making a speedy recovery. In the height of the crisis, as almost all the products of the Business Schools, including Harvard turned like ostrich dipping their heads in the sands. Now they are accused the prime culprits of the present crisis. Now they are treated as dirty as pick-pockets and street pimps for their greed and immorality.
Breach of Trust and Mismanagement
Almost all products of the B- Schools who are elevated to CEOs or MDs of big corporations in the banking, insurance and financial sectors are charged with breach of trust and mismanagement besides eating away the big bonuses and committing money laundry, presenting false and fabricated statements, for their greed and fraud .In their passion for glamour and glitter, they violated the basic principles of management due to their ignorance of the fundamentals of Political Economy, as their knowledge, more correctly information, is in capsule form without any deep understanding of theory, history and strategies.
Political Economy
Political Economy or Economics is as old as the origin of the human societies and also of the nations. Kaudialya, the Indian strategic thinker, in his ‘Arthasatra’ and Machiavelli, the Italian strategist, in his ‘The Prince’ had dealt with Political Economy . The Pharaohs of Egypt had applied basic economic principles in constructing dams and pyramids while employing the Israelites as slaves, besides successfully managing the economy for a very long time. Learning from the Pharaoh, Moses too had applied basic economic principles in levying taxes, waging wars and sharing the loots, including women.
However, Economics as a branch of Science emerged with the publication of Adam Smith’s ‘Wealth of Nations’ that paved the way for the emergence of Capitalism, especially the industrialized western economies. It was J. M. Keynes, a well known British economist, with his General Theory, saved Capitalism from eternal peril during the Great Depression of 1939. F.A. Hayek became the first Nobel laureate in Economics.
The Great Depression
Almost all industrialized economies have been undergone with the phenomena of ‘business cycles’, characterized by high growth, stagnation and recession. Innovative entrepreneurs could make new strides in the growth of Capitalism. However, the Great Depression of 1929 had challenged the very foundation of Capitalism as supply had not created its own demand. It was J. K. Keynes who prescribed the medicine of public spending and deficit financing besides championing the cause of establishing the IMF and the World Bank, gave new foundation for Capitalism.. However, the over dosage of the Keynesian remedies, especially deficit financing and public borrowing, designed for emergencies, have become a regular practice for almost all governments. As a result, they have getting ineffective, just like the regular and over-dosed use of anti-biotic.
New Corporate Culture
After the Second World War, especially during the Cold War period, most of the military technologies, including internet, had been put into civilian applications that gave new impetus to industrialization, networking, globalization and trade-in-services. The Multinational Corporations (MNCs) have emerged with grater influence over almost all governments and their budgets exceeded far ahead of the governments of smaller countries. Information Technology has become the most powerful tool in the hands of the MNCs to control and manage their operations, spreading across several countries.
They have entered in all major services like, banking, finance, insurance, networking and communications, management and consultancy, marketing, retail trade and real estate to have a virtual control over the entire economy and to make quick profit in terms of billions and trillions. A new type of corporate culture has emerged with the motto of making quick profit, high salary and bonuses at any cost. It has created greedy and jealousy CEOs and other corporate heads and managers who thrive with fraud and corruptions besides false and manipulated accounts and statements to deceive the government and the general public.
The Service Sector has started to dictate or dominate all the other sectors, side tracking both Agriculture and Industrial Sectors and thereby upsetting the very basis and balance of an economy. Information Technology has penetrated in all the domains of the service sector, reducing everything into bits and bytes. In the over-emphasis of Information, the worth of Knowledge and Wisdom has withered away.
Death of Economics
Almost all B-Schools rivaled each other for creating and supplying greedy, jealous, manipulating and unscrupulous, high salaried managers and business executives in the age of corporate culture. They challenged the very foundation and wisdoms of Political Economy. In the new age of Information Technology, a new breed of economists with mathematical and statistical tools and computing techniques have dominated the scene and they have denigrated Economics with a set of formulas and equations., that have reduced economics, a minor branch of Mathematics ort Statistics. Economics has been reduced into mere data and information without the backing of any wisdom and knowledge. Thus Economics has lost its purpose and foundation besides its human face and social commitments towards the weak and the poor. As a result, Economics, basically concerned with ‘wealth of nations’, ‘social well being’ ,‘income and employment’ and ‘constitution of liberty’, resource allocation efficiency and optimality’ has become unfashionable in the age of highly fashionable ‘Business Management or Administration’.
Do We Need Business Schools?
The actual contribution of the Business Schools and their graduates in the healthy development of the national as well as the global economy and in the promotion of global trade is a disputed or questionable one. Of course, they have squeezed the entire economy for their own greed and added the misery of the millions, especially of the poor for promoting consumerism, aggressive marketing and credit based purchase of consumer items. They ruined the financial stability of the millions of families, turning them into debtors and wiped out thrift and saving mentality from the society. With their lavish funding, they have even corrupted all the major religions that have become more and more materialistic by promoting consumerism at the cost of spirituality and compassion. It must be highlighted that almost all major business and industrial establishments are built by the real entrepreneurs without qualifications from any of the B-Schools. Now the basic question is do we need the immoral, unethical and greed and fraud- promoting Business Schools and their short and long courses and academic programs.
Re-Inventing Economics
It is high time to make Economics free from the narrow boundaries of a set of mathematical formulas and equations besides the computer generated data and information. It is a crime to reduce economics within the narrow framework of data and information, ignoring Knowledge and Wisdom. Wisdom and Knowledge are our real wealth and they alone save us at the time of crisis and perils. The world needs the visions, wisdom and knowledge of the Political Economists for a fair and ethical global order and society.
.
Universities must come forward to give re-emphasis to the study of Political Economy by attracting the best students and professors so as to develop a holistic view of the working of an economy, inter-dependence of its various sectors and units besides the diverse economies of the world and finally of the global economy.
It is time to critically examine the social value and worth of the mushrooming Business Schools with their long and short term academic programs, including M.B.A and several other gilt-edged diploma courses without any strong basis in Economics. The present global crisis made the world realized that management is not mere making profit and earning high salary and bonus, by exploiting both the workers and customers and cheating the share holders and the governments.
Managers must be made socially committed for the creation of wealth, income and employment and thereby attaining social well being both at national and global levels. They have to plan, organize and getting things done for attaining the set objectives of their firms and also the broader social goals of making a sound and healthy economy. They must be made to follow a set of well defined business ethics and fair practices. Other wise, they become criminals to brake the very foundations of families, enterprises, nations and the entire global economy.
(* This is the sixth series of work by the author on The Great Depression II – the Present Global Crisis. All his other works can be found if a search is made in the internet under ‘Dr. Raju M. Mathew’. )
About the Author
Dr. Raju M. Mathew is an economist, a strategist and theoretician with strong background in Cybernetics, Education and Information Technology with long years of experience in teaching and research, including directing a major research project and supervising ten doctoral works. Dr. Mathew formulated two basic theories of knowledge consumption and knowledge production that got published in 1985 and appeared in several languages. Now these theories are known in his name and have become an area 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 is the founder president of the International Forum for Knowmatics & Knowledge Technology (IFKT). Some of his works are available in the site: www.ifkt.net. Now he is working with the Al Ain University of Science & Technology, Abu Dhabi, UAE.
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 and the poor. Dr. Raju M. Mathew can be contacted by e-mail: rajoocyber@yahoo.com.
rajoocyber 12:27 21 Apr 09
ISLAM, CHRISTANITY AND CONSUMERISM
AND THE GLOBAL ECONOMIC CRISIS:
DR. RAJU M. MATHEW
Global Economic Crisis
The world is under a great economic crisis. For the conventional economists it is only a Recession and not a Depression at all, for their partial analytical techniques, over-simplified models with unrealistic assumptions and over emphasis on data. It may take at least five years for them to realize that it would be a Great Depression and by that time it may be over. When Cybernetics is employed for the study of the working of the global economy as a whole with multi-sector approaches on the basis of the deeper understanding of Political Economy, we are forced to admit that this is not a simple Recession, but the Great Depression II that requires not only Economic Stimulus but Ethical or Spiritual and Political Stimulus Packages too to recover.
Dreadful Consumerism
Not only the capitalist or developed countries but also the Socialist or Islamist or Less Developed Countries too are brought under the Great Depression II. It is not only Islam or Christianity but also Communism could not save the world from Consumerism and the unethical or immoral business practices that are hundred times deadlier than Materialism or even Atheism. Consumerism has emerged as the greatest threat to the very existence of Capitalism for it drained away saving and investment, that constitute Capital without which there is no Capitalism.
The corporate culture has corrupted almost all religions and communist movements and made them the victims of Consumerism. The corporate culture made everything expensive and unaffordable for the majority for it aims only ‘the chosen few’. It has speeded up the process of the demise of spirituality and moral values. Eroding of the basic spiritual values has paved the way for greed, fraud and corruptions at all level. The present crisis is the result of the total ethical and moral failures rather then the economic and technical reasons.
Spirituality and Human Values
In the demise of spirituality and basic human values, religions turn towards rigorous and harsh customs, practices, devotions, stereotype prayers and fasting without any element of love, mercy and forgiveness. All these factors acted as catalysts for religious fundamentalism. A big vacuum in spirituality of religions paved the way for terrorism. The youth, especially the poor, are indoctrinated and getting believed that the greatest virtue is to become martyrs and to die and kill for their religions for they are rewarded with all the luxuries and pleasures of a ‘seven star hotel’ besides the service of seven virgins in the Paradise after their martyrdom. Sex, drugs and money are administered to them as the immediate rewards for their loyalty and commitment.
Islam and Christianity
Islam and Christianity, the two major world religions have miserably failed, in practice, to imbibe the basic moral, spiritual and ethical values to the humanity. After embracing the corporate culture, they have been rivaling each other in spreading across nations and adhering to the rigorous religious practices. Their champions or leaders have become as materialistic as the ancient Epicureans.
Because of their warring or quarreling factions and their quench for pomp and acquiring more and more material wealth, almost all religions miserably failed to lead the world in the realm of spirituality and to inculcate minimum ethical and human values to the society. Most of the sects or cults in Hinduism and Buddhism also assumed the role of big multinational corporations with assets in terms of trillions.
The Ideology of ‘the Chosen People’
Both Islam and Christianity claim that they are the chosen people of their God. The ideology of chosen people was originated at the time of Abraham and developed into violent and aggressive form during the time of Moses, after the Exodus, on the march of Israelites towards the ‘Promised Land of Canaan’. The Bible gives a detailed account of the kings or peoples who were looted, raped, captured or exterminated in the hands of the men of Moses.
When a particular tribe or race or religion claims that it is chosen by the God, it undermines other tribes or races or religions and subscribes to the deadly ideology of superior race or tribe or religion that would become the basis of Fascism as advocated by Adolph Hitler. As a result, others are branded inferior or even sub-human being so that they could hate or subjugate or exterminate them and thereby they could please their God.
Christianity is a thousand kilometers away from Jesus who taught to make peace on earth and to love and forgive the enemies and to consider all human beings the children of the Loving Heavenly Father as Islam is away from Koran that taught to worship the Most Merciful Allah who demands every Muslim to give mercy and care to all human beings, animals and even trees. Both Islam and Christianity are corrupted with power, money and Consumerism besides the deadly ideology of ‘the chosen people’ with the right to punish or exterminate the disobedient or men without the ‘official version of the faith’ or men with alien faiths who are branded as ‘Pagans’ or ‘Kaferes’ as the communist are branding their enemies as ‘revisionists’ or ‘imperialists’.
For the Just, Loving and Merciful God or Allah, all men are chosen and everybody has an equal right for a decent life just like the people of the OPEC or OECD countries and everybody must observe spiritual and ethical values. Nobody has any right to dominate or exterminate other people. If Islam and Christianity fail to bridge the gap between the rich and poor and to end discrimination between the Black and the White and upheld basic spiritual and human values, at least among their own followers, their very worth and relevance are questioned in the age of the Global Crisis and thereafter. This is the fundamental crisis of both Islam and Christianity, threatening their very existence.
Oil and Cars
Industrialization started with steam powered locomotives and nurtured by the automobile industry that speeded up the processes of urbanization and fast life style besides giving predominance to oil industry. Oil producers and automobile industry started to dictate the entire economies of the world, especially of the western industrialized economies. OPEC has squeezed oil importing nations by charging exorbitant price for oil and amassed the wealth of nations.
The corporate world has effectively employed Information Technology to have a virtual control over the entire globe by e-money, e-banking and e-commerce and spread the corporate culture of greed, fraud and consumerism. Oil, cars and consumerism, originally acted as the catalyst of boom have turned the catalysis of Doom or the Great Depression II. They have drained away the saving and investment habits of the middle class and made everybody debtors and upset not only the balance of economies but also of the Nature.
New Awareness
People are getting aware that for the wrong logistics of their places of stay, work, shopping and entertainment, they have to travel a lot and burn out a lot of oil unnecessarily. . They could have avoided over 60 per cent of their journeys, especially in the age of advanced communication technologies. By a proper use and development of public transportation system, many could have avoided owning cars or traveling in cars. A good majority of business trips are unnecessary or unproductive. ‘Traveling less and less and consuming lesser and lesser oil for the recovery of the economy and for the health of the environment’ would emerge as a major slogan in almost all countries. All these make a very dark future for the oil, automobile and hospitality sectors.
Natural Death
It is time for the Multinational Corporations to have a natural death for their crimes committed against the humanity, especially against the poor nations and peoples. Championing the cause of consumerism, they have even turned a malignant cancer of Capitalism and Globalization besides corrupting Islam and Christianity and other religions. They destroyed the economic foundations of millions of families and virtually wiped out the middle class not only in the west but also in emerging economies with their aggressive marketing strategies.
Selling dreams and fantasies, they dragged everyone into illusions. They have invisible link with various terrorist organizations. They are involved in money laundry, corruptions and fabrication of wrong accounts or documents and cheating the shareholders and the general public. For the high salary and bonus besides aggressive marketing spending millions of dollars and making big profits, they make cost post of production the highest as they push up of cost of living. No popular government would be dared to support them with tax payers’ money.
The Stimulus Packages
It is fact that, none of the stimulus packages, though in terms of several trillions, could save the world from the impending peril and miseries of the millions unless the world saves itself from the dirty hands of consumerism and controls the growth of automobile industry besides reducing oil consumption to the extent of 30 to 40 per cent and turning towards spirituality and ethical values. This is the time for fair business practices and code of ethics for all economic activities besides regulating marketing and advertisements. Ensuring sustainable income along with reasonable saving and investment is the only means for recovery on a long time basis. Otherwise, all the stimulus packages and recovery efforts would vanish within three to six months after making some symptoms of recovery and then aggravate and prolong the crisis to the extent of ten years.
Recovery and Growth
The present global crisis taught the humanity the basic lesson that various socio-economic systems or organizations could not survive without the basic moral and ethical values and some element of spirituality and maintaining the balance of the Nature. It is high time in burying down Consumerism and Corporate Culture besides adopting slow and simple life styles and turning towards spirituality and setting right the imbalances between urban and rural sectors and also between agriculture, industry and service sectors and the different regions of the world for the very survival of humanity. Humanity could not afford to pay so much high salary and bonus in terms of several millions to the CEOs and Managers and to allow the traders and business people to make such a huge profit within a short span of time. Cost of production and cost of living must be put back at the minimum for sustainable development.
It is a great crime against Humanity and the Nature to burn out so much oil and generating so much heat and sound from the speeding millions of cars and driving away the millions from farms and rural life to the cities. It is high time to redefine the very meaning of development and urbanization especially when the entire humanity is under threat and peril. The fruits of development must be reached in the hands of all people, sparing none on any ground.
(This is the seventh series of work on ‘The Great Depression II’ by the same author and prepared on 20th April 2009).
About the Author
Dr. Raju M. Mathew is an economist, a strategist and theoretician with strong background in Cybernetics, Education and Information Technology with long years of experience in teaching and research. He has so far supervised ten doctoral works, including the basic approaches of Hinduism, Buddhism, Christianity and Islam towards knowledge, economy and spirituality.
Dr. Mathew formulated two basic theories of knowledge consumption and knowledge production that got published in 1985 and appeared in several languages. Now these theories are known in his name and have become an area 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 is the founder president of 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 for an early recovery, so as to save the lives of millions, especially the young and the poor. Dr. Raju M. Mathew can be contacted by e-mail: rajoocyber@yahoo.com.