Haresh Daswani: The U.S. financial crisis

Column by Haresh Daswani

George Bush has just officially declared something that, bluntly stated, would say, “Ladies and Gentlemen, We are in deep deep trouble, and I will be off in 40 days, thank God.”

The bigger question is, didn’t anyone see this coming? Wasn’t anyone able to think of how to stop this from happening? The economy took a wide shift, and while the world is catching up with having productions and services outsourced to them, the United States hit a snag on keeping itself a foot ahead in being competitive.

Manufacturing has mostly been outsourced to Asia, customer services and transcription services has also been outsourced as well, to lower cost. The question is, what is remaining in the U.S.? Even the banking sector is moving its trading offices and processing work to Singapore, who might lose it out to India later. While everyone wants to bring the price down, the economy originally taking charge of that industry has not found itself entirely ready for the shift.

The more important part is that things have gotten too expensive. While the employment rate is fair, and salaries are decent, the price of commodities have skyrocketed to exponential and unrealistic levels. The percentage of salary going to rent and transportation has gone so high that people are forced to rent houses rather than buy, and commute rather than use their cars.

There will have to be a correction, and during this correction period, it will definitely hurt. Prices of real estate will have to drop to rational levels, and fuel will have to drop too. People will be forced to realize it is not a good idea to drive a 4 liter pick up truck to work if nothing will be kept in the back. And that it is a good idea to have three more people ride along going to work than driving alone. These little things can be blessing, but cures require bitter pills sometimes.

The world will be there to help out as well. After all, the entire world has also invested in the USA, the economy is so codependent a snag in the web can cause chaos. This time, more than ever, we can all feel how interconnected everyone’s economy is.

This crisis will be resolvable, but things will have to go down. It will not be the best of times for a while, but for the cash-rich, it is the best time of their lives.