The urge to treat the financial mess as a bad dream, with the itch to get back to life as it existed earlier, seems to be an overwhelming desire in the financial world. The regulators are of course working against the odds, meaning the entrenched, to fix the loopholes. The easy life and the porous system got us into a mess, with even those who lived by good work ethics not spared by the fall-outs of greed & short-term goals over long-term steady growth. The ills of mortgage woes, peddling derivative products & increased hedge-fund activities are already being felt again. If given half a chance, it could soon balloon to a full-blown crisis eventually.
There are no other sure cure for the ills than the old-fashioned one that has stood the test of time – live within the means, not on borrowed time & money. Easy money is always a disaster, however tempting it might be to get by another day by mortgaging our future further. One gets a feeling that countries are just looking for scapegoats as the easy way-out. America has untenable debts with no means of meeting them with the present policies. China is not willing to revalue its currency fearing unemployment at home.
There are not only limits to sustainable growth but also globalization. They are not cure-all and panacea for our ills. Though globalization is supposed to open-up our minds along with domestic markets, it also pre-supposes all are able to enjoy a fair playing field. In effect, it leads to impoverishing some countries but enriching their leaders! The military junta in Myanmar is able to entrench themselves further in this process, with the financial muscle arising from the rich natural resources of the country. China does not care for “internal problems” of countries in their dealings with them; after all, it could amount to interfering in their domestic issues! It is a very practical way to get their bite at all times!
Even with the issues that brought the world to its knees very much alive, the signs are troubling and we are unable to get to grips with fixing them effectively. The power brokers & politics are coming in the way, above national & world interests. It is like an addict, getting back to his wayward ways even when under medication! The blame- game is going on ad nauseam, but the issues are losing the seriousness in the process. The tipping point is nigh! It cannot be, America can import just because the price is right with China exporting just to keep the factories humming, thereby keep their people away from the devil’s workshop!
Then again, speculative products and easy loan syndromes are very much out in the open; even with some great ideas to print money, buy up the bonds, mortgages etc., in an effort to flood liquidity for the financial institutions to get back into the game! The elections are also getting precedence over economic issues. Soon the harsh realities will come to haunt & stare at us with a vengeance.
Gone are the days when people took responsibilities for their actions. Now, it looks like our leaders are just biding their time to pass the buck to the future, for them to sweat it out! The US & China issue of trade imbalance looks also in the same mould; no one has an idea how to fix the issue, can just blaming each other resolve it?
Our leaders are worried over the political fallouts, which blur the realities and the need for urgent action; one is reminded of the saying – Nero fiddled, while Rome burned! We feel history cannot repeat and we have newer tools to find escape routes. But the sad fact is the common man everywhere, especially in the poorest countries, has limited ammunitions and has to bear the full force of the fall-outs. The rich can find ways to re-jig their tools but the brunt of the force of economic collapse will bear down on the man in the street, living by the ideals of old-fashioned hard work, but made to carry the burden of others’ greed. It is time indeed we limited our endless greed and focused on sustainability. We need real action to forestall further disasters. Enough of “business as usual”!