collapse is perceived to threaten broader economic stability. It is not a current within socialism per se; rather, it points to a corruption of free-market capitalist systems, which would normally allow defective companies ("lemons") to fail. The most common government interventions that earn the term involve infusions of government capital, as in bailouts, and may include some government control over company decision-making, as in nationalization. The Emergency Economic Stabilization Act of 2008 in the United States has been cited as an example of lemon socialism.
On 14th December 2010, US Central Bank’s FOMC held its last policy meeting for the year, the committee kept rates on hold and its assets buying program intact till the end of 2Q2011. In its policy statement Fed has said “information received since the FOMC met in November confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment. Household spending is increasing at a moderate pace, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Longer-term inflation expectations have remained stable, but measurers of underlying inflation have continued to trend downward.”
Whether the statement is positive or negative, I would leave that judgment to you. But think of the money provided to these lemons and then reconsider if it should have been like that. Chairman Fed assured senate that Quantitative Easing (QE) will create 700k to a million jobs. But consider the path of the warm in the above chart; clearly that has not been the outcome thus far. Dodd-Frank Act reasoned for the release of documents that detail a massive $3.3 trillion dollar aid program offered to the financial industry during the height of the financial crisis. Chairman Fed changed his views during a recent interview as he mentioned that without QE unemployment rate would have been close to great depression or 25%.
In the last FOMC meeting, President of Federal Reserve Bank of Kansas City, who is also a voting member of FOMC, Thomas Hoeing voted against the decision because he is concerned that a continued high level of monetary accommodation would increase the risk of future economic and financial imbalances and, over time, would cause an increase in long term inflation expectations that could destabilize the economy.
But despite all these, the phrase “privatizing profits and socializing losses” is visible all around the world, even in Pakistan. And indeed, there is a class, who is obedient enough to follow the system because their lifestyle is linked with this systems existence, or it could have been the artistry of brainwashing that after watching all the bad in last many years, they think this system will work. These people form an army, for wonder whom. If you dig world’s financial past, you will come across with many occasions where this system was saved by squeezing more out of general public and perhaps the world is going through with another round.
The famous “Ghost Song” by the doors sings, “Choose they croon the ancient ones, the time has come again, and choose now they croon beneath the moon”. While talking to an ex-world banker with Pakistani origin that why we are blindly following the system that is not working for the west? Replied, their per capita is $50k, if we can have that kind of income and then we come across problems that the west is in, he would love to solve them. Sad but true.
In the end I would pray to God for those many talented people of my country, who are blindly following this system, that they understand the real cause of the problem and gathered strength in devising one that can suit us.
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