The common pillow talk these days after parents have put their children to bed is no longer about love or hope. It is on their worries about losing regular jobs, over due bills or the looming foreclosure of the house purchased. They see shopping malls and local stores going under and sight of neighbors packing and shifting to smaller sub-urban homes is so common. They see the Banks erstwhile symbols of financial stability going bankrupt, which erodes their confidence further, leading to worries if their insurance and savings are still safe, after loosing their shirts on the stock markets.

This contagion began as a credit crisis and has now become chronic crisis of confidence.

Apart from the greed and irresponsibility of Wall street executives, this recession is also caused by major failures by our Economists and Banking Experts to understand our times where the Globalization and information technology has not just changed the business practices but has transformed the way business is conducted. The whole system is exposed to manipulation and worst is if some one succeeds in such manipulation and corrupting the system, then deed can be repeated with ease around the globe within no time. Forget about being prepared, our Economic leadership has been devoid of any clue about all this. The Scale of devastation is only now beginning to surface now.

The Economic leadership is not in control of things came into evidence so many times in recent past. One of the worst example of this was the Treasury Secretary of USA Mr. Henry Paulson along with Federal Reserve Chairman Ben Bernanke who after wide consultations submitted the economic bailout of 2008 plan allocate over 700 billion dollars to purchase bad debt incurred by financial Institution. The bill is passed by cabinet and the congress after long debate and then is sort of abandoned as it realized that buying the debt was not the appropriate solution to the situation.

This lets us understand both the scale of the problem and our inadequate ability to rescue.

So shall we retire to fate of recession, job losses, bankruptcies and mayhem ??

The solution is not just possible but workable. We must take confidence building measures and decide first, that status co will not work any more or as President Obama famously said “Party is over”. There would be definite macro and micro level steps to be taken to come out of this situation.

Reforming International Banking System

Work On Productivity Improvement

Develop the Immerging Economies