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Finally, people are accepting that the financial meltdown is happening. Those who predicted that it would last for three months, now feel that it might be longerthree years or more. There is a scramble by governments to say that it is a temporary thing. Central banks have been cutting interest rates but it is not working as stock markets continue to plummet. As the chaos spreads, most people have started playing the blame game.

In all the madness, I have seen two types of evaders emerge while reacting to the financial crisis. One is the cheerleader and the other is the soothsayer.

Cheerleaders
This would consist mostly of governments of various countries and heads of associations of all sorts. Their mantra is keep working, dont panic. The financial crisis will correct itself somehow. No one asks them and even if they did, they never explain how. It seems to me that they believe that if they keep chanting it long enough it will somehow work! Meanwhile, they are taking corrective actions like slashing interest rates drastically and nationalising all sorts of companies, including banks. They are writing off loans and increasing wages of non-productive sectors like government run organizations including politicians and bureaucracy as per the sixth pay commission. However, this did not include the defense personnel that guard the nation! The nationalized banks have been told to hold loan melas, so people can get themselves into further debt but there is a ruleif those who avail themselves of loans fail to pay three successive instalments, then the banks should write it off as a non-performing asset (NPA) and only try to collect the principal if possible!

Simultaneously, they are trying to use pull, violence, threat and blackmail against private companies. Take the case of Jet Airways for example. When Naresh Goyal laid off employees as he was cutting down the number of flights so he can keep the company viable, the ex-employees approached political parties who attacked the offices of Jet while simultaneously threatening more violence including refusal to allow the company to land its flights. The next day, Goyal was forced to apologise and rehire employees to work in non-existent flights!

If you think this is irrational, think again. In California, courts have told utility companies that are on the verge of bankruptcy that they cannot lay off employees! Meanwhile, private power plants are being forced to produce power and have been warned they cannot shutdown even if they are going bankrupt! The next logical step would be nationalization and disappearance of technically able people to keep the power plants operating which would lead to the destruction of all industries that are dependent on this power, including manufacturing and IT. In India, especially in Tamil Nadu, technically able people have already disappeared from many state companies while the government has forcefully implemented the state welfare quota system, the highest in the country.

Our PM is requesting that the companies not lay off people even if they cut production by 50% or more. Many companies are going bankrupt but cheerleaders like our FM are sayingdont worry, keep working. It is just temporary. What else can you expect from entities who evade reality and dont know how it will magically correct itself?

Soothsayers
This group largely consists of industrialists and unions who are politically connected, whose companies operate through favors rather than innovation, and economists who are unable to understand why their economic predictions are failing. These are same union heads, politico-industrialists and economists who have said money is the cause of all evil in society in the past and that the rich should help the poor by voluntarily giving away their money. You will hear them in the media blaming the rich countries for putting us in the mess. You will hear them whining about how they had been fooled by greedy capitalists when capitalism is yet to be practiced as a system in any part of the world. Every time they try to establish capitalism, either nationalistic socialists or welfare socialists hijack it. America almost got it right but common man politicians, social activists and philosophers who continue to bleed it have managed to destroy it. These politicians and economists have never defined who the common man is or what is the greater good. These economists have never learned that there is no such thing as common good or common man. Therefore, these soothsayers predict that it will change in 2 months or in 2 years but they are just practicing astrology of economics as they have no real idea as to why it failed in the first place. Many fail to understand why the financial crisis happened and have barely touched the surface of how it will resolve itself. They are the equivalent of black magicians and numerologists. This group thinks reality doesnt matter, as the reality is some mystical unseen force that can be changed by the wave of a magic wand.

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