And here in the USA, the meltdown on Wall Street dominates the news. Friends (lawyers, bankers, software and hardware people) who know something about the goings-on -- which I don't -- are uniformly critical of the unbridled "free market" that they think has caused all this. (One said "free market", then stopped and corrected himself, saying he really meant "wild market"). Among many other things, the free and easy mortgage practices of recent years, which has left millions with loans they can't repay, taken from financial institutions that threw any notion of due diligence to the winds. Too, there's been fraud and corruption and great greed. And it's built a vast house of cards that is now crumbling.
So many questions. In no particular order, and not necessarily as well-formulated as I'd like, consider a few.
* Can a country survive indefinitely on enormous levels of debt?
* Are we therefore now watching the decline and fall of a great empire, as Paul Kennedy predicted nearly 20 years ago?
* As ever-more Indians move to living in debt, should we be worried?
* What is the meaning of a massive government "bailout" to rescue the financial system, to rescue financial institutions -- even if it has been rejected by lawmakers? Is this not a fundamentally socialist measure?
* In essence therefore, how does this differ from India's now-reviled move to nationalize banks in the '60s?
* If certain individuals and institutions choose to take risks and get into trouble, even massive trouble, why shouldn't they sink? After all, isn't risk and its consequences -- possibly great rewards, but just as possibly great disaster -- fundamental to capitalism and free markets?
* Is greed an Achilles heel of capitalism, just as the absence of individual incentive was an Achilles heel of communism?
* Is this therefore the fall from grace of capitalism, just as the late 1980s were the downfall of communism?
Finally, it seems to me that so much depends on human psychology, even individual psyches. I mean, I know that as markets plunge, my own savings are vanishing into the ether. My instinct is to cut my losses and cash in those savings. Yet I know that if I follow that instinct, I simply accelerate the slide. Now maybe I can afford to resist that instinct, at least for a while. But how many others can resist?
What happens to the man looking forward to retirement next year, watching his retirement account melt away? What's he going to do with his instinct? Multiply that by millions of people. Mix in the likelihood that eventually Americans will realize they cannot pay back the vast amounts they owe. Sprinkle on top the anxiety of investors in the American economy, pushing them to look at investing in, let's say, Europe and its euros.
What do you have now? Among other things, you have a manic Monday, when the Dow sank 777 points.