The mechanics of the economic meltdown in North America
In mid-March, 2009, the President of Brazil placed the onus of worldwide economic mess on “white people with blue eyes.” His derogatory remark referred to people in America at the helm of government, who had, over the last few decades, imploded the world economy with ignorance.
The claim made by the Brazilian President is debatable. But we know it is the people of North America and their lavish money splurging that has brought about this state of affairs. When you have basked in near decadence for six decades and more, you tend take luxuries for granted.
Not any more though. China is now the factory of the world and India does the paper work. The United States is still a fountain of new technology; however, high wages make many businesses unviable. And of late, President Obama must be sending the shivers into the armaments industry since the prevailing mood is dovish. Very soon America will distance itself from all forms of belligerence. They are simply too broke to engage in the luxury of confrontation.
The wooden headed economists at Fannie Mae, Freddy Mac and AIG brought this on America and the whole world. And waiting round the corner is the collapse of the auto industry. There is not much President Obama can do to revive the economy. He will simply have to stay the course and keep firing CEO’s to dish out more “bail out money.” President Obama is the heir to a mess created largely by his predecessor.
Not many in North America would have foreseen these repercussions: A lack of institutional funding for future credit and a meteoric rise in unemployment to cripple earnings. If the world were not so badly affected by the economic meltdown and the ripple effect, Americans richly deserved voting for George Bush for two successive terms.
But the crux of the matter is the basic North American inability to live within their means. The credit card was important to fuel a vibrant economy. And now banks themselves are reluctant to lend money.
To run the economic machine of a nation you first need to run your house without going into the red. Consider the South Asian by comparison. Even the South Asian woman is the antithesis of her North American counterpart: She handles the grocery shopping of her house like a role model economist and is adept at balancing the family budget. There is much for an Alan Greenspan and a Bernard Bernanke to learn from her.