Oh my god, the world is ending.
It’s funny because just a few days ago, scientists in Switzerland set off the largest particle accelerator, nearly creating a black hole effect and swallowing up all the world’s citizens in it. Then, today, the economic market took such a plunge that people around the world are at risk of losing their homes, their jobs, the food on their table. With impending doom on the horizon – and the U.S. elections just 50 days away – how can anyone ignore a situation like this one?
Whoever gets elected to the U.S. presidency is going to be stuck with perhaps the biggest job in history. We’ve got simultaneous wars taking place in Iraq and Afghanistan, conflicts with Russia, Iran and North Korea, and now the worst financial setback in history. I don’t think Obama nor even the ever-nationalistic McCain signed up for this.
First, we started with a housing crisis. Banks felt unduly generous and liberally gave handouts to unlikely loan applicants who, not being able to pay up on their mortgages years later, were forced to leave their homes, thus forgoing any forthcoming payments. This left banks with huge debts and put them in a choke-hold by investors. As the situation grew worse, more and more American investors became leery, and many eventually turned away from loaning to banks, who then had to look across the ocean to fill in the gaps. Foreign investors were heralded for their help, until they too decided they’d had enough.
Now, here we are, four days after the 7th anniversary of America’s first rendez-vous with terrorism, and instead of lives lost, it’s jobs lost. Figures state that, out of the 25,000 people employed by Lehman Brothers – who hit a loan wall and filed for bankruptcy today – heavy amounts of job cuts are expected. Besides the week from hell, with Fannie Mae and Freddie Mac starting off the week by borrowing national money, Merrill Lynch is selling out to Bank of America for $44 billion, while AIG is asking for loans from the Federal Reserve.
The financial decline is an eery reminder of what happens when power sharing and independence collide. Just look at the situation in South Ossetia who, taking cues from Kosovo, fought for independence based on their need to promolgate their distinct cultural identity. Although South Ossetia has a long way to go before competing with corrupt Russia and copying Kosovo’s success, Kosovo has given them the idea: that piggy-backing off of another world’s power might just be the push they need to get ahead – on their own terms.
Financial markets have tried the tactic, jumping onto the cushioned partner bandwagon one by one, to save their – erm, assets – only to produce lackluster results, leaving average Americans dealing with the domino affect. I don’t think most Americans are directly familiar with the Great Depression, but we’re veering dangerously in the same direction. Lehman Brothers’ bankruptcy, and the subsequent market fallout, is monumental in financial terms. Situations like the ones in New York this week haven’t been replicated since the 1930’s. As a “realist” and not a “pessimist,” I don’t honestly think things are going to get better very soon.
As the financial world connects to their blackberries and business partners around the world to try to wheel and deal a savings plan, American citizens – and citizens of the world – are left reeling. How can we know what to expect in the near future? Will there be gas at the station tomorrow? Will there be bread in the supermarket? Most Americans are up to date on Zimbabwe’s financial strain, where thousands have been left without food, either because they can’t afford to buy what’s in the store or because the store is empty. But I don’t know of many Americans, who live a life of relative luxury compared to the rest of the world (a recent article on the Texas hurricane quoted a man saying he slept in his car all night with the air conditioning on, and was desperately seeking a hotel because he couldn’t sleep without the air con) can recognize right now, even as the Dow falls even further, that their lives are going to change. They can’t fathom that the crisis in Zimbabwe could ever even closely resemble their own. I know I can’t imagine it. If I have a job and I get paid for it, why won’t I be able to put food on the table?
Then again, I’m in France. In this country of paper pushers, it’s a wonder anything gets accomplished. Even a credit crunch would take ten years to finally hit France, where everything is on a decade-long delay. As far back as 2005, one Marseille post office was actually operating with one of those gray screened Apple computers from the early 1990’s that looks like it should be used for playing Pacman instead of for calculating postage prices.
Time will tell. I’m not a financial expert, so my clairvoyance of the future is limited. I will say, however, that the result of New York’s exceptionally bad business week is going to take its toll on every American, rich or poor, as well as people all across the world. The Bush administration can’t bury its head in the sand any longer. To say that they didn’t have this coming would be a huge overstatement. You can’t spend billions of dollars on a war that has no purpose and not expect financial consequences. And here we are. The domino effect.
So, I suppose it didn’t start with the housing market, did it. We can’t be sure of the source. But the outcome? Yes, that’s fairly certain. Citizens of the world, be warned. And buy that extra gallon of water, just in case.