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The Economy
19 October 2008
“It’s the economy, dummy.” was a phrase coined during one of the Bill Clinton campaigns for President of the United States. It was coined because at the bottom line, the one thing that most voters really care about is their ability to pay their bills, save for their future goals and retirement, and maintain/improve their current lifestyle. In the western society, everything starts and ends in the amount of money you have or don’t have in the bank. There are, of course, many other issues to worry and care about, but without money – you’re nothing. This is why most people in the western world go to work every morning.
If and when the economy collapses, people lose their jobs, they have less money to spend, they may not be able to pay for their mortgages, and it’s like a viscous cycle, things get worse. In the long run, the lack of financial security is a sure recipe for societal instability in any western democratic society, not just in the United States. Twentieth century history, and even our own current world – clearly show that an economic recession provides a fertile ground for a plethora of non-democratic groups and movements.
But it’s not just that. The economic strength of the United States has a direct effect on the stability of the entire world. In particular, it is directly connected to current peace negotiations and peace agreements in my region of the world – the Middle East. Every year, the United States gives billions of dollars as foreign aid to Egypt, Jordan and Israel. Officially or unofficially, these grants are part of the peace agreement pacts signed by these countries. If, for example, the United States will no longer be able to continue with its foreign aid to Egypt, the call of radical groups in Egypt to cancel the peace treaty with Israel may eventually prevail. For another example, the Palestinian Authority receives aid in hundreds of millions of dollars, just to “keep things quiet” (apart of the official humanitarian cause). So the economic state of the world and the United States is not just about whether you and I will keep our jobs, it’s also about whether peace agreements will be kept in place or be renounced.
Consequently, if the economy is so important, how did we get to this unbelievable situation in which the fate of the world economies is being determined by an amorphous and unstable thing called “The Stock Market”. True, the stock market allows companies to raise money based on positive speculation, and it has fairly contributed to their growth and prosperity while enabling investors to make money, but I have to ask: do we really need to base ALL our financial hopes and dreams on a deck of cards? To me, the stock exchange – for all intent and purposes – is like a national casino facility. Just place your bets and watch the roulette as it determines the fate of your pension fund, bank account and insurance policies.
Some people say that this is how capitalism works, but if governments help banks and insurance companies to bail out of a crisis, can we still believe in pure capitalism? As we could all see lately, pure capitalism doesn’t always work, and eventually we need the government to finance and save businesses and establishments when they collapse. So it appears that there has to be some kind of a balance between capitalism and socialism (not to be confused with communism, which is something else) if we want our societies to live to tell the tale.
Of course, everything is relative in life. There are countries, like Sudan, where a considerable amount of people don’t even have a bank account, and they don’t even know what a stock exchange is. They don’t have mortgages, they don’t care about the fuel prices because they don’t have cars, and they don’t dream about the latest state-of-the-art LCD TV or the latest gadget. For them, life is a daily struggle for survival, real survival. The following photo shows a Darfur refugee camp in Chad, a country with its own civil war:
http://en.wikipedia.org/wiki/War_in_Darfur
http://en.wikipedia.org/wiki/War_in_Chad_(2005%E2%80%93present)
If you were able to click the Wikipedia links above and read those articles, consider yourself very fortunate. You still have an Internet connection, something that they, the victims of these wars, may never see in their lives.
Now, it would be plausible to maintain that if the different ethnic/social groups of people in Sudan and Chad will one day cease all fighting, adopt a form of democracy and start developing their societies and economies – they will eventually gain peace and prosperity. Who knows, maybe with the help of the United Nations they will be able to achieve such a goal within the next 30, 50 or 100 years. But I must ask, and please forgive for being overly imaginative: should the people of Sudan and Chad also dream about having a stock market one day (however far-fetched it may sound at the moment)? Well, frankly, I’m not quite sure about that. In any case, at the moment, I have bills and rent to pay, so if you’ll excuse me, I have to go to sleep and then go to work in the morning.