What went wrong?


There are so many blame game swirls around here about who is responsible for this recession? Each recession is unique and we can’t blame some particular industry or group of people or a single entity for failure. This recession is really a combination of many things, it is very hard to pin point why and what went wrong? But we can concentrate on who lost most from this recession.
  • Developed nation’s unemployment rate should not go above 5%, but now U.S.A unemployment rate is 7.6% and some places unemployment rate is above 10%, which is unacceptable.
  • As usual, undocumented workers and some legal immigrates are more affected in terms of jobs and they were returned or forced to return to their home country, which is unrecoverable. As per Chicago Tribune report, there are some 367K undocumented workers forced to return and volunteer return may be close to 1 million.
  • As of legal immigrates, most of them are degree holders returned to their home country and joined various local companies. For example, IBM laid off some 4,000 people and offered them a job in Argentina, Brazil, China, Czech Republic, Hungary, India, Mexico, Poland, Romania, Slovakia, Slovenia, South Africa, Turkey, and United Arab Emirates. Good for those emerging markets, they need more talent people, and recession is good time for them to get good resource. It is same as last recession.

Most of media blaming people’s greedy for this mess. But I don’t agree with them because we are at capitalist era and making more and more money without breaking any law and buying more stuffs are basic for capitalist. There is no limit for the money and commericalism, all of us at least want to buy or explore the following

  • Decent home at prime location.
  • Send kids to good school and any Ivy League college.
  • Benz/BMW cars.
  • Hawaii trip .
  • High end 150 inch plasma TV.
  • Home theater.
  • $5000 super bowl game.
  • Gold and diamond watch, jewelry.
  • Fun trip to Las Vegas/Disney world.
  • Europe/Asia/world tour.
  • Cruise from Florida to Norway.
  • Last but not the least donation to charity.
We are progressively developing and there is no end of is, again this is fundamental of capitalism. The whole economy is moving because of this spending and our eagerness/greediness to explore, experience new technology and world.

But how soon we want to do all is matters. For example, if we want to buy a 150 inch plasma TV for $10,000, A) spend 5-6 months to save at least $5,000 and get credit for remaining $5,000 B) buy it as soon as possible get all by credit. The first (A) way is wise one, we are utilizing our future money at same time spending some from our own saving. We have to decide when we want to go world tour, at the age of 25 or 45. If we go at 45 we can spend some money from our saving and get some credit if necessary.

It is all depends on our decision making. I think lack of clear decision making is the main reason for this recession, starting from individuals to financial industry to Wall Street to Main Street.

Source:

http://www.chicagotribune.com/news/nationworld/chi-deportees-09-feb09,0,5333975.story

http://money.cnn.com/2009/02/05/news/companies/ibm_jobs/

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