Fuse the News

I don’t have any major disagreement with what President-elect Obama said during his election campaign, that we need to build the economy from bottom up, and I hope he would be able to do so. But for me the most important question is that what he really means by “Building it from bottom up”. I will discuss what I have to say, about this most important question, later in this article, but let me describe the whole scenario first, according to the most recent progress, on this issue.

 I am really enthusiastic about his speech which he is planning to deliver on Thursday, which, according to the media, is going to be his major speech, on economy. He is planning to propose some major tax breaks for working families and businesses, which according to his advisers, will fall somewhere, between $675 billion to $775 billion.

 We all know that he was not feeling comfortable, with the idea, of giving big businesses any tax cut, during his election campaign, except of those who will create jobs within USA. But reconsidering his options about such tax cuts is not something we didn’t expect; at least I was very sure about it from the very beginning. Now here is the point where we need to discuss the difference between, what needed to be done, and what can be done?

 We all have seen the miracles of “free trade”, as all the devoted advocates of free market has been trying to tell us, but we still need to see the miracles of good governance and we still want to see the miracle of peoples, seeking change.

 Pundits and advocates of free market are trying to tell us that what we are facing right now, in the shape of, financial and economical crises, is a fruit of bad governance and deregulation which has nothing to do with the ideology of free market. But how can we forget that the key stone of the free market is to generate “Profit” no matter what it costs. That’s what big financial companies did or tried to do, over the past years, and what we are facing right now is the cost of their ambition, to generate “Profit” at any cost. That’s how free market works.

 Now let me tell you, what is the bottom line of the economy and how can we build it from bottom up?

 For me, the bottom line of the economy is the affordability of an average consumer and how it affects the whole financial system. Housing industry collapsed because an average home owner was unable to pay his mortgage on time. Financial institutions collapsed because they lent to such consumers who didn’t afford such amounts and if they did they simply lost that status because of losing a job or for another such reason. Every thing collapsed because an average consumer’s level of affordability went down.

 Corporations, big businesses and financial institutions were forced to sent jobs abroad just because of cheap labor and affordability issues. So at the end of the day it’s all about affordability of not only an average consumer but a multinational business as well, because today’s financial markets are all connected to each other. World has become a global village. Nobody can set his own standards within his geographical limits as everybody has to compete globally.

 Now all I have to say is that according to me, building economy from bottom up, literally means, building the affordability of an average consumer. Creating more jobs and creating more opportunities for working class can be the ultimate act to stimulate the economy. Working class is the one who need serious tax breaks. They are the peoples who will ultimately create wealth and will enable economy to function once again.

Trackback URI | Comments RSS