HomeThe recession is a huge learning curve and a big test for the government, economists and businessmen.
Recession is not an accident that just happens ' like a car crash, it's the culmination of a series of events.
Dealing with recession is dealing with the management of change. Recession is a change in the economy and if business and politicians can't find new ways of coping, they will fall by the wayside.
The problem with recession is politicians and economists base policy on historical data ' they know what has happened in the past and how people have reacted. For politician's recession is a juggling act based on keeping the economy prospering while maintaining their popularity.
Sometimes, the two don't go together. A parent still gives the child medicine needed to get better even if dosing the child makes the parent unpopular.
That's the basis of our economic problems. Businesses want to make profit and politicians want popularity to stay in office. These two objectives don't solve our problems; they undermine economics and make our lives worse.
What we need are new solutions. Saddling our children's children with billions in debt is putting off decisions for someone else to deal with, not taking action and showing leadership.
The banks are manipulating the economy. They put us in this mess in the first place ' and the government were happy not to regulate their actions while money poured in to the City. Now the banks have revealed their true face ' a Dorian Gray portrait of greed ' while stacking countless billions of taxpayers' cash in their vaults.
Even after all that has happened in recent months, almost daily new depths of banking greed emerge ' like the weekend's revelations of the huge losses the Royal Bank of Scotland, Santander and HSBC have suffered in the $50 billion Wall Street fraud.
The people suffering are those working for Woolworth's, the car firms and countless other small businesses who have lost their jobs or are on short time with no imminent prospects of life improving.
The past week is damaging the pound in the little man's pocket.
- Taking the interest rate down to 2% is great for homeowners ' but for pensioners living off their savings or looking to buy an annuity with their pension, the rate means after tax they receive about 1.5% on their savings ' an income of £7,500 a year on a £500,000 pension pot.
- The property gravy train has hit the buffers ' with prices 15% down on the year and forecasts that the worse is yet to come, millions who are relying as property as a pension and need to sell to clear their debts are facing a financial struggle
- Two million people are expected to be out of work by Christmas ' the highest jobless total for 11 years.
- The Pound plunged to the lowest ever rate against the Euro ' starting the week at 1.15 euros and ending at 1.11 euros. Performance against the US dollar was stagnant ' with the Pound at $1.48 at the beginning of the week and $1.49 at the end.
- The City and Wall Street don't seem to know which way to turn ' the FTSE shifted up from 4049 to 4280 ' a rise of 231 points ' while the DOW staggered from 8637 to 8629, a change of eight points.
This article was written by eCommerce Associates for Bank -- Accounts and our Finance Blog
About the Author:
eCommerce Associates work with some of the UK's top merchants and brands in
the affiliate market. eCommerce eCommerce Associates work with some of the UK's top merchants and brands i the affiliate market. eCommerce Associates have three blog sites http://ecommerce-associates.info/ , http://leisure-activities.blogware.com/blog and http://financial-news.org.uk/ where all of our articles can be viewed.