FDR prolonged -- not ended -- great depression

STRATEGIES FOR
SURVIVAL AND GROWTH IN THE AGE OF
THE GREAT DEPRESSION II

DR. RAJU M. MATHEW
Al Ain University of Science & Technology,
Abu Dhabi, UAE
This is the Great Depression II
The crisis that we are now facing can rightly be called The Great Depression II of 2009 . And it is several times severe than the Great Depression I of 1929. It is not mere a financial meltdown; not mere a credit crisis. It is not a recession to disappear within two years. The dimensions and intensities of the Great Depression II are quite different from the early one. Who had brought out the present crisis and where had gone all the money or credits that were available before a few months back, are the two questions that the general public is asking?
Who has brought it?
Almost all banks had been lending five to ten times more than what they had, by the principle of 80/20 or even 10/90 in the age of electronic cash and e-banking or e-commerce, without bothering the repayment capacities of the borrowers that ultimately resulted in the credit crisis and crushing of the stock markets. Unfair business practices and high level frauds and corruptions had made every thing very complex.
The heavy expenditure on armaments incurred by almost all nations and terrorist organizations had aggravated the crisis. By siphoning off billions from the accounts of the big corporations and millions of individuals, especially the elderly, the terrorist organizations made money for their operations. Governments borrowed heavily to meet their defense and other expenditures. The undue growth of the defense industries is possible only by jeopardizing all the other industries and sectors. It is one of the major contributing factors for the present global crisis.
Terrorism and the Poor
Every terrorist attack creates new demand for sophisticated weapons and almost all governments are forced to set apart a sizable amount for defense that ultimately affects the weaker section of the population. There exists a nexus between the defense industries and terrorist organizations. The only beneficiary of terrorism is the arms traders and the defense industry. Whatever may be the slogans and causes, terrorism adds miseries of the common people and its causes are lost ultimately. For terrorism, governments have to cut both developmental activities and welfare schemes by spending more on weapons. Neither the killers nor their victims gain anything but the weapon traders. Terrorism makes governments more tough and oppressive.
Fast to Slow
After high and fast growth and booms now it is the turn of gloom, recession and depression. There is a limit for speed and growth. Development based on aggressive marketing, consumerism and globalization, ignoring the vast majority, cannot go on very long. Recessions and depressions are self correcting mechanism for the maladies of a society that strives for unlimited growth at a high speed. No human being or economy can run fast for very long. Now, Information Technology and the Modern Management Techniques do not have any answer for the present crisis. So also are the cases with IMF, WTO, ADB and the World Bank that are on the verge of collapse. These are the basic lessons that the Great Depression II teaches us.
Everybody has been running fast. Fast life style has become the rule, As a result, nobody has any time even to dream, imagine, think and learn. Knowledge and scholarship have been pushed back for data and information; learning has been reduced into an exercise for scoring of higher grades or marks; reading has been neglected for the sake of scanning and extracting from the internet. Critical thinking and creative ideas or works have been denigrated; superfluous analysis and mimicries have been dominated in the place of sound theories and strategies.
In the fast life, even young men and women could not find time for romance and love making other than fast sex, that too without the botheration of child birth. The greatest causality is the family life, the cordial relationships between wife and husband and between parents and children. Even in religion, faith in God and love of human beings are pushed back by the harsh and rigorous practices and rigid interpretations, without any element of mercy and forgiveness. Materialism dominates over spirituality even in religion. After a period of fast life, everybody has to go back to slow life.
The Basic Reasons
The value and importance of rural life, especially agriculture are withered away for the over projection of the glory of urban life and the service sector. But cities could not survive without farming and rural sector. Urban sector is depending too much on the rural sector rather than the villages relaying on cities, because most of the villages could be easily made self sufficient with regard to the basic necessities of life.
Service sector of an economy could not flourish when its agricultural or industrial sectors are weak. Information Technology and Modern Management Techniques could not survive in the age of crisis; they are only catalysts for boom when the economy is sound and healthy; they are the catalysts of doom or bust when the economy is weak and sick. The inter-sector imbalances with regard to growth and wage or salary structures and the striking disparities with regard to the standard of living of the people of the various sectors are the basic reason for the present global crisis.

How Long It Will Be?
The Great Depression II, now in its first phase, would continue for a minimum period of five years, sometimes ten years, in a more rigorous way. It brings about a crisis of faith in technology, money power, managerial talents and the entire banking and insurance sector, besides the money and stock and share markets and the credit system. The highly acclaimed economic and business wisdoms and formulas are crushed and shattered. A good majority of the Business Schools and Management Consultancy and Software Companies will be wiped out. A sense of helplessness and even meaninglessness are to dominate in the thinking and behavior of not only of the common people but even the professionals and top executives. Everybody, including the top billionaires and technocrats and the most trusted business houses, has become vulnerable.
Gone are the Ages
We have to accept, though painful, that the age of consumerism and the dominance of the service sector over the agriculture and industrial sectors are over. So also is the case with cities over the villages. The age of malls and supermarkets and multi-billion dollar advertisements and promotional activities are over. The unreasonably over-salaried CEOs and other executives have become an extinct species mainly for their greed, corruption and illegitimate high bonuses coupled with their inefficiency and lack of social commitments. The age of pomp and extravagancy is finished. The simple reason is that humanity could not afford consumerism any longer. Gone are the ages of the Great Business and Financial Gurus and Advisers, because of their visions and foresights.
Who Could Save Us?
Men of ideas, vision, scholarship, theories and strategies and multi-disciplinary backgrounds could alone solve the present crisis. The only agency to deal with The Great Depression II with long term strategies and policies is the Governments that must be strong enough and duly functioning. No single country or government could tackle it; instead, global efforts and strategies are required. No savior will come to save us; we must be our own saviors. The UN must be made strong enough to act globally for dealing with the Great Depression II, chalking out the area of international cooperation. It must act on a war footing
Threat to Peace and Democracy
History teaches us that every major crisis or revolution is followed by dictatorship or war. Fascism was the offspring of the Great Depression I of 1929. Crisis in the Old France led to the French Revolution; October Revolution was the consequence of the socio-economic crisis in the Czarist Russia. Unless the present crisis are dealt immediately, millions of hard hit and unemployed people, besides the angry debtors will march towards the streets and the capitals and capture the power that invariably leads to dictatorship and then the war. It will also lead to clashes between people of different regions or interest groups and ultimately civil wars. Mass burglary or looting will become the rule and billions will die out of hunger, epidemics and civil wars. The Great Depression II shall be the greatest threat to peace, democracy and rule of law.
Time to Act
Now we are in the early stage of the Great Depression II and as such the people and the governments are in a riddle or puzzle to grasp the crisis. In the next stage they will be in an absolute shock to realize the losses and damages that they have to encounter; over 80 per cent of the jobs will be wiped out; a good majority of trade and business people will turn bankrupts. . At this stage, so many people will commit suicide or reach on the verge of mental brake down. This is the stage of total crisis of faith; people will loose faith in every thing and they will be ready to anything. This is the most dangerous situation that will lead to revolutions, mass crimes and lootings and even civil war. In order to avoid all these situations, we have to act urgently; the governments, international agencies, governmental and non-governmental and world religions must work together to deal with it in order to avoid greater miseries.
Immediate Relief Measures
The UN must set up The Great Depress II Relief Fund to help millions of people who lost their job and income consequent on the Great Depression II. UN must make all major religions and other organizations, besides all countries, to get involved in these tasks. The Fund shall be operated in such a way that its benefits must reach to all the needy at the right time. The UN and various international agencies must be ready to take some drastic steps including cutting the salary and other benefits to the extent of 30 to 40 per cent of all its employees, including the top executives and also limiting other expenses.
On the basis of the UN guidelines, all government must come forward to make a salary cut to the extent of a minimum 30 per cent and to put an upper limit for the salary and other perks of all those who are employed, including in the private or corporate sectors. Actors, singers, players, models and people in the show business must be ready to cut their remuneration by taking into account the global crisis. Nobody should be allowed to make overnight fortunes. We have to realize that the undue growth of a particular entity or sector or region or a country must be at the expense of the others and it should dealt as cancerous growth affecting the entire global society.
Cutting the cost of production as well as the cost of living is the only way for survival and growth in the age of The Great Depression II and thereafter. All nations must be ready to cut their defense expenditure to the extent of seventy to eighty per cent and a joint global strategy against terrorism must be launched as no nation can be made free from it. Other wise, the crisis will prolong and millions will dies out of hunger.
Ineffectiveness of the Keynesian Strategies
The Great Depression II could not be dealt with a set of conventional monetary and fiscal policies as have been suggested by the Keynesians or the Neo-Keynesians that have become totally ineffective for their over-doze or over-saturation. There is a limit for technology and management techniques, including marketing in this regard. Now what are required are a massive behavioral change and a new way of life, freeing from consumerism and fast life style, a byproduct of materialism, on the part of the society as a whole. Greater cooperation and mutual support between nations, even at global level, are the only means for survival and growth.
Re-creation and Re-learning
The Great Depression II brings life slow. It is the time for re-creation and re-learning and acquiring new knowledge and skills. It is the right time for creative works and above all reinventing the basic human, family and religious values coupled with humanism, spirituality and cooperation. It is the time for baby booms. It is the time for the re-birth of rural and farming sector. People find new meaning in agriculture and country life. Now, it is unproductive to make heavy investments in cities and high technologies and the service sector. Religions have to play a very important positive role by developing mutual respect and cooperation rather than rivalry and aggressive fundamentalism that bring Terrorism, as a by-product.
Long Term Strategies
The best long term strategy to deal with The Great Depression II is to invest heavily on the rural and the farming sector and develop their infrastructures along with making heavy investment in education, especially basic science and engineering, social sciences and humanities. Learning must be encouraged by developing libraries and encouraging the overall reading habits of the people. Cost effective Open Learning-- Open Schools and Open Universities or Virtual Universities, even in Science and Technology must be set up or developed to make education reach in the hands of millions all over the world.
These strategies are equally applicable to both the East and West, developing and developed nations, including GCC countries. Nobody, including the young and dynamic American President, Barrack Obama, has any magic stick to deal with The Great Depression II, other than following the above noted term strategies and policies. It is high time to realize that no affluent nation can survive by keeping a large number of nations or people poor and depressed and selling arms and defense equipments and following consumerism. It is high time to realize that terrorism and religious fundamentalism add miseries and sufferings of the humanity and bring hell on earth, for they are the tools in the hands of Satan who wants to bury down the peace and happiness of the humanity.
From Dooms to Booms
When implementing the above policies and strategies, people will come out with savings, innovative ideas, plans and strategies and to put them in agriculture, industry and service sectors within three years. All these will push up economic activities, including global trade and business. International cooperation between developed and developing or underdeveloped societies and nations would emerge so as to ensure a minimum development and standard of living for all. The people, especially the young, will dictate their terms of peace and co-existence over the Governments, Religions, Political Parties and the Terrorist Organizations. There is no doubt, the humanity would withstand the crisis and enter in the New Age of Peace and Development for the bold and honest efforts of the youth. This is not the end of the world, but the beginning of a New Dawn for the young, provided they are ready to act for the well being of the entire global society without sidetracking anybody.

About the Author

Dr. Raju M. Mathew is a strategist and theoretician with strong background in Economics, Cybernetics, Education and Information Science & Technology with long years of experience in teaching and research, including directing a major research project and supervising ten doctoral works. The Netherlands based FID nominated him as one of the twelve international members for its Committee on Research on Theoretical Basis of Information Science in 1983.

Dr. Mathew formulated two basic theories of knowledge consumption and knowledge production that got published jointly by the FID and the USSR Academy of Sciences in 1985 in the work, ‘Theoretical Problems of Informatics’. Now these theories are known in his name and have become the field for doctoral research.

In 2005, Prof. Mathew proposed Knowmatics and Knowledge Technology as the two Post-Information Technology disciplines for processing and handling knowledge so as to develop knowledge industries. He also set up the International Forum for Knowmatics & Knowledge Technology (IFKT). Some of his works are available in the site: www.ifkt.net

Dr. Mathew is on a mission of making the world aware of the impacts and intensities of the present crisis, the Great Depression II of 2009 and persuading the governments and international agencies to formulate correct strategies and policies and implement them urgently to deal with it and make an early recovery from it, so as to save the lives of millions, especially the young. Dr. Raju M. Mathew can be contacted by e-mail: rajoocyber@yahoo.com. Some of his other works are given in his site: www.ifkt.net

(It was originally prepared on 25th Jan. 2008).

You point to the 2 decades of economic dominance after WWII as proof that his policies worked?

Of COURSE we dominated for 2 decades after. Europe was in shambles as well as most of Asia. We pretty much had the only standing factories and industries in the world at that time. We were the only ones who COULD do well at that time simple because our country wasn't bombed to hell.

Seriously - people need to start using some common sense.

A conservative and a liberal are watching the same foot race between several men. The race ends and the liberal notes that the winner was wearing lead boots and thus the lead boots caused him to win.

The conservative wisely replies that the winner won not because of the lead boots BUT INSPITE OF THEM.

The American economy did well when FDR and his cronies were weakened. Again Joe is wrong.

"the American system as reformed, partly by the New Deal and partly by a carry-over of wartime measures, did perform wonderfully well in the two decades after World War II."

The wartime economy did it all. The new deal was more fascist meddling and fixed nothing.

later.