For a long while, we lived in a world where life was good - sometimes too good to be true. Time has eroded whatever little sense we had to think for ourselves and therefore we had fallen prey to the American dream.
We dream. Everyone could afford cars and homes, and accomplish anything they want if they are willing. We dreamed for so long with an optimism that can only feed on our naivety. We became followers - blind and lazy. This is reflected in our self-reinforcing nature and is one of the main reasons the world has evolved into bubbles. This self-reinforcing nature has already switched gears and will continue to drive the economy down to its grave unless stopped. That is IF it can be stopped.
The market is an interesting concept, almost having a life of its own. However, like any child, it needs boundaries. The responsibility of these boundaries rest on the regulators, and let’s not forget that these regulators are also bureaucrats. It is beyond me to guess what underlying intentions exist between these regulators, but one thing I can be certain – they are children too. The world today is ruled by those who are perceived to be better than the rest, rather than those who know what they have to offer. This is our death sentence.
What is reality? We have a market system which has failed, a credit system which has locked up, financial instruments few really comprehend, loss of confidence, loose regulations and not enough accountability. Where has the money gone? They went where they came from – nowhere. These inflated values are simply being deflated into real hard value or simply put, those who have hard assets. Demand for jobs, goods and services have evaporated because they were inflated as well. Sad to say, but it is impossible for everyone to have jobs especially as advancing technology replaces human labor at increased efficiency.
Make no mistake: This is a global recession, a global crisis. For those who believe China’s growth is the key to spark a global recovery, follow my line of thought if you will. China’s total workforce is 820 million strong and 150 million migrant workforce (almost as big as the US workforce of 153.7 million). While the US’s true unemployment has grown to 13 million, just the Chinese migrant workforce unemployment is already at 20 million. That is 20 million people sent back to their homes without jobs and no income.
China can only produce 8 to 9 million jobs per year so at least for the next two or three years, the unemployment rate will remain extremely high or climb even higher. This is a clear indication that while China still enjoys a strong economy based on its GDP and resources, it is a matter of time before recession hits.
It is also important, however, to keep things in focus. In the US, unemployed have heavy debt (house, car, credit cards) and are not able to meet their obligations long term if they are out of work. Most Chinese have savings and little or no debt, live frugally and can more easily withstand loss of wages in both the short and medium term. Yet the size of the population suggests that if recession hit China, it will hit harder than it has struck the US. Now that is a scary thought.
The underlying problem is a public mentality – exploitation for personal benefits. With exploitation, there comes a price. You also have to realize it is no longer enough to rely on governments, leaders or supernatural religious power. The recovery has to begin with changes on the personal level.
(Part 2 to follow tomorrow: Now back to work.)
2 comments:
This is an excellent piece of article. I especially like your remark about the need of making personal changes. Unfortunately, human beings all have some levels of amnesia; we all tend to forget our ordeals a bit too easily when the golden days return.
well, Anonymous, what you say is very true. And the human "amnesia" you talk about is actually very adaptive too, since it works in the other direction as well.
Give it enough time, and we will get used to living in the great depression that is upon us. Because if we don't, then...well, suicides, homicides, and desperate crimes will overtake our society. This happens to be my response to part two of this post as well.
That is, let's have faith that humans are adaptive enough to forget about our former glorious days of comfort and security, and live realistically in the now. Let's hope that desperate men will not overrun the lot of us. Let's still dream of surviving in the present, instead of dreaming to return to what has passed and gone.
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