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Economic Green Shoots of Recovery?

Updated on June 10, 2020
Kenny MG profile image

Kenny is a keen and enthusiastic biblical knowledge promoter, gospel apologist, a fighter in God's army, a defender of the Christian faith.

International Economic Recovery

Billions of tax dollars and billons more in international currency went into bailing out the banking sector after falling into an almost complete melt down beginning with the demise of the Lehman brothers. Governments were faced with a very sticky wicket whether to allow more banks to fall or whether poring federal funds into what was seen by many as a bottomless pit. Many ordinary citizens were sympathetic and frown at the thought of their hard earned funds going into a system that is otherwise frothy towards them penalizing many poor citizen for a minor glitch in their banking agreement. Should anyone have shed tears or felt sorry for institutions important though they maybe to the world economy, but who have recklessness gambled and put us all at risk? The rising job losses, mortgage defaults and business closures are a testament to banking failures. The Obama bailout plans where criticized but while we disagree with such moves the economy was in meltdown and if the banking sector had gone down many more business would’ve gone, putting many more out of work and homes. The choice for a financial sector bailout was a hard one for a new administration which many feels should’ve been allowed to fail as they have only themselves to blame. Many analysts see the banking system with their reckless betting, and uncontrollable bonus culture at the heart of the problem facing the world. However if the banks had been allowed into free fall, it would be like a Molotov cocktail waiting to explode and no household around the world would be able to withstand the aftermath and would spark riots in many trouble spots.


The Russians point the finger at western democracy for the financial woes, America getting the biggest stick, echoed by Iran and many African governments. While there may be some truth in this arguments the world financial markets have been allowed to get too big without any international regulation. This beast was swallowing everything in its path and there had to be a correction, just sad so many innocent have been caught up in the downturn. Big well known names lenders in America who got into trouble because they were selling subprime mortgages on the international market to people who least could afford it. International markets bought into this causing widespread disruption in Europe with many high street banks folding and many more crippled by the effect. This was the root of the problem which brought the international money market to a standstill. So while many of us disapprove when our money was pumped in to help stabilise the market, it was seen as a wise move by financial analyst. Many question whether the Lehman Brothers should have been allowed to fold, which sent shockwave throughout the world banking sector, and sparking a run on banks in the UK and other European economies.

Green Shoots

The world is now focused on international monetary systems recovery with positive news coming out of Germany, Japan and France that their economies have brushed off the downturn and have entered positive territory. President Obama indicated a positive upturn in the US economy, referring to it as “green shoots of recovery” but cautioned against complacency, referring to it as fragile. Federal Reserve chairman Bernanke echoing European governments optimism, has said, “The worst US recession since the Great Depression was probably over”, but he also struck a note of caution saying, “the recovery would be slow and painful”. Many banks have indicated an increase in their profit margins, and have started paying back some of their bailout loans some have started high street lending again, but still many remain cautious. While there are many very positive signs in the UK economy, the housing sector has started to show positive signs, business and the retail sectors are showing positive signs, but the job market is still a worry. The sad thing for the UK government is an election is due in lees than a year, and behind in the polls cannot wait to see more positive signs in the economy.


In situations like these it’s the poor who bear the brunt of the economic and financial pain. Many will still continue to fall behind with their mortgages, or lose their homes completely, while many more will be thrown out of work adding to an already bloated unemployment figure. Chairman Bernanke warned that US unemployment rate would top 10 per cent by the end of this year and would be very slow to come down. The unemployment rate reached 10.8 at the end of 1982 and many analysts are predicting it may be surpassed if the present trend continues. However, many are optimistic despite the obvious fragility still evident in the US economy, pointing to the continuing positive and almost stable territory of the stock market. With the improved financial position many banks have returned to the inflated bonus culture, rewarding many for carelessness, which had got us all into this mess in the fist place. It adds to the call led by Obama to curve such behaviour and put a cap on bonus payments. How much more can the system heaps on the poor, and how much longer will they continue to suffer at the hands of reckless bankers? If this bonus culture continues, and God forbid that another meltdown returns, would we be as willing to offer bailout? I think not!


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