Summary |
Business Cycles upwings and downwings in the economy, booms and bursts are a characteristic of the capitalist economy. The current recession had its origin in USA due to reckless lending by mortgage banks leading to their inevitable bankruptcy. The financial empires built by securitization and leveraging of these loans collapsed like a pack of cards and several banks and financial institutions with such well known and reputed names as Bear Stearns, Lehman Brothers have disappeared from the scene.
What started as a Wall Street crisis has rapidly spread to Europe and to a lesser extent to Asia, leading to collapse of business confidence everywhere. It has resulted in growth contraction and rising unemployment a result of recession. Global institution like OECD, UNCTAD, World Bank, IMF, etc, along with economic groupings of nations like G-8, G-20, ASEAN are working out possible solutions to come out of the mess. But it is for individual nations concerned to come out with appropriate policy measures relevant to their situation, to save their economics and lives as also jobs of their citizens.
Ultimately, recession is an opportunity to bring about drastic changes in the economic and taxation policies and the economic system with the aim of not only eliminating the defects of capitalism as also the evils of unsuitable greed which they give rise to.
The book takes a peep into various aspects of recession, deflation, financial bubbles over centuries like Tulip Bubble, Mississippi Bubble, etc. It also covers in greater detail the several financial crises in recent history with detailed analysis of the latest one US Financial Crisis, as it continues to hurt a large number of economies, including ours and what lesson it has for us.
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