The Wall Street financial meltdown in the United States is far from over despite the $850-billion dollar stimulus passed by the U.S. Congress. Interest rates have been lowered by the central banks of the world biggest economies but according to most economists, this would not be enough to stave off the worst economic downturn since the 1930s that has now spread to Europe and Asia.
Joining the wailing ranks of the giant auto industry in the United States where General Motors and Chrysler have both threatened bankruptcy should the U.S. government renege on its to promise to help the ailing auto sector, Toyota of Japan recently slashed its earnings forecast, warning all and sundry of its first-ever operating loss.
With Japan sliding into deeper economic recession, China, the world’s fourth largest market, is the latest country to follow the U.S. Federal Reserve in trimming interest rates to fend off a worsening economic slowdown.
According to British central bankers, interest rate cuts alone will not stave off the growing global economic ills that were stoked by the U.S. housing market crisis, which also caused the downfall of major global financial institutions. A new policy tool beyond cutting interest rates would be needed and monetary policy will not be enough to bring Britain’s flagging economy back to life.
The consensus among economists is that the forecast, which is already dark, will even be darker if not enough stimulus is implemented.
As one writer said, “the linchpin of the global economy, the all-might U.S. dollar, is on a death march... this is going to be a flat tire in the middle of nowhere.”
Continuing on with his observation, he said: “To see this collapse of global finance as a problem would be short-sighted indeed. Of course in the West that seems to be the crime of which we are universally guilty, one and all. We must stop seeing the world in the false terms in which we have been schooled....Only then can we begin to appreciate that what is dying before us is only doing so because we didn't save it when it could still be saved. In its current form, the system is beyond redemption. Any effort to piece this global economy back together will amount to nothing more than the penultimate concentration of wealth in history. A concentration so great that talk of police states and new world orders would cease to be talk all together. If you believe that another loan will see you through this rough patch and into open seas on the other side, you have not understood what is happening.”
In the Philippines, where living poor is the norm among urban dwellers, what people see ahead is just the same as the past years. Neglected by their government and constantly pushed towards the miserable depths of poverty, where they are always confronted with the risk of losing their homes and livelihood, they demand, as year after year goes by, the abolition of the prevailing system.
With a population of almost 89 million people, the urban poor make up about 30 per cent. They suffer from extreme poverty caused by lack of gainful employment. To survive, they rely on very dismal wages and meagre earnings which always lag behind the soaring costs of living. Because most of them could not afford housing, they usually end up living in dumpsites, under bridges, along railroad tracks and river banks which are very dangerous areas and beyond the reach of social services. Many of them suffer from diseases like dengue, hepatitis and tuberculosis, if not extreme hunger and destitution.
Meanwhile in Gaza this Christmas, there was no more room in the morgue as hundreds of corpses and wounded were added on the list of daily dead after the Israeli army continued its relentless bombing of Hamas, reminding many of the “shock-and-awe” campaign the Allies launched over Baghdad in 2003. Reports from Gaza spoke of numbers of dead bodies lying on streets, the dead piling up on top of each other because hospital morgues were already full.
While most economists have declared that the market has failed, poverty and war on the other hand, continue to persist. In both situations, the victims are the little people. Those whose homes have been foreclosed and ordinary workers who have lost their jobs, because the economic stimulus offered by the government is not for them but for the big banks who got greedy. Among these harmless civilians are women and little children who have no means to fight off aggression and defend themselves against bombs and the superior firepower of a raging nation.
The best economic minds will continue to debate and shape the financial policies necessary to stem the current global financial crisis, to analyze to death the ideological underpinnings of free market fundamentalism versus government spending and regulation, but all this effort will be for naught if the ordinary worker who has just been laid off or the new homeless people because their homes were recently foreclosed will not be part of any recovery plan. Or if the lamentations of the hungry and the poor are not heard. Or the war machinery is kept running amuck against defenceless women and children as the West continues to turn a blind eye.