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“In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.” Confucius.
In the prevalent worldly kaleidoscopic environment can then one sequitur that governance has been either absent or misplaced, specially the good variety? Those now facing the indignation of “poverty” are from countries which hitherto credited themselves with good governance; these countries over the years for varying reasons, wantonly labored to strangle in their governance “household management” viz economy. Rather frustrating and enigmatic happening to a lay person like me, perhaps portentous and inevitable to the more discerning and knowledgeable. Poverty in countries that are badly governed remains passé and non detriment.
Not very long back (maybe now too) the undivided family system was followed in many parts of India. The head of the family was the sole decision maker, arbitrator financier and in some cases the sole bread earner. The family fortune or misfortune rested on his actions and directions. Some families prospered and thrived while some suffered mainly economically. The lives of the members of the families were directly dependent and connected to the whims and fancies of the Head, though rumblings and confrontations did take place but these were resolved swiftly, irrespective whether the complainants remained unsatisfied.
Some say that the world we live in has become one big family consisting of member countries who are termed as developed and those that are developing; the under developed and fringe countries not overtly considered being very distant cousins. Most also consider America as head of the family assuming the powers of that of the undivided family system. On the global economic front and the monitory scene it rightly appears so. It has been the world’s largest national economy since the 1870 and remains the world’s largest manufacturer, representing 19% of the world’s manufacturing output. In 2009, consumer spending coupled with government health care spending constituted 70% of the American economy. About 30% of the entire world’s millionaire population resides in the United States (in 2009).Furthermore, 34% of the world’s billionaires are American (in 2011). The US is also home to the world’s largest stock exchange, the New York Stock Exchange. It also boasts the world’s largest gold reserves and the world’s largest gold depository, the New York Federal Reserve Bank. The United States is also home to 139 of the world’s 500 largest companies, which is almost twice that of any other country. A large contributor to the country’s success has also been a very strong and stable currency. The US dollar holds about 60% of world reserves, as compared to its top competitor, the euro, which controls about 24%.
The US is by far the most heavily invested-into country in the world, with foreign investment made in the US measuring almost $2.4 trillion, which is more than twice that of any other country. The US is also by far the largest investor in the world, with US investments in foreign countries totaling over $3.3 trillion, which is almost twice that of any other country. Agriculture is a major industry in the United States and the country is a net exporter of food. With vast tracts of temperate arable land, technologically advanced agribusiness and agricultural subsidies, the United States controls almost half of world grain exports. The United States is the world’s largest manufacturer, with a 2009 industrial output of US$2.33 trillion. Its manufacturing output is greater than of Germany, France, India, and Brazil combined, despite manufacturing being a small portion of the entire US economy as compared to other countries.
That over the past few years the head of the family has encountered and is facing problems is obvious; the repercussions on all the members of the family are far reaching and ominous. Volumes have been written and hours have been aired, the problems analyzed and possible solutions enumerated. Some of the more prominent are the absence of technological innovations through research and development especially after the advent of the internet in the nineties. This has resulted in fall in investments and unemployment. The cutting edge technology though has increased the efficiency in most of the sectors but there has again been a rise in unemployment as machines take over manual labor.
The finance and the banking sector as we are aware have been hit by greed and mismanagement. The numerous instruments and “products” devised and promoted by financial institutions and banks have not only foxed the general public but also the regulators. But the universal reason remains firm and fixed; the mismanagement and poor governance by the politicians, executive and legislature.
Apparently the Euro model has suffered setbacks. Considered by some as an alternative and a competitor, again due to poor governance and dependence on the US economy, most of the countries are in financial straits. A thought which to some may appear farfetched, does rankle; most of the European countries have been colonizers and with the colonies gaining independence, the revenues (loot) to the colonizers has vanished!
The developing countries have survived more by default than by design. Their dependence on USA has been marked and is increasing by the day. For them to progress the present noticeable pitfalls will have to be analyzed and avoided. Their GDP growth rate is high but yet the gap between the rich and the poor has increased.
Being a Ernest Hemingway fan, I cannot resist his take, “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”