Global Financial Crisis 1929 and The Recession of 1958

The Great Depression was a worldwide economic downturn starting in most places in 1929 and ending at different times in the 1930s or early 1940s for different countries. It was the largest and most important economic depression in modern history, and is used in the 21st century as an example of how far the world's economy can fall. The Great Depression originated in the United States; historians most often use as a starting date the stock market crash on October 29, 1929, known as Black Tuesday. The end of the depression in the U.S is associated with the onset of the war economy of World War II, beginning around 1939.

The depression had devastating effects in virtually every country, rich or poor. International trade plunged by half to two-thirds, as did personal income, tax revenue, prices and profits. Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by roughly 60 percent. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as farming, mining and logging suffered the most. However, even shortly after the Wall Street Crash of 1929, optimism persisted; John D. Rockefeller said that "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again.

The Great Depression ended at different times in different countries; for subsequent history see Home front during World War II. The majority of countries set up relief programs, and most underwent some sort of political upheaval, pushing them to the left or right. In some states, the desperate citizens turned toward nationalist demagogues—the most infamous being Adolf Hitler—setting the stage for World War II in 1939

The Great Depression ended

The turning point in the depression was in 1933, as can be seen in the above Industrial Production graph. Some economists attribute the subsequent recovery to monetary expansion that began after the bank holiday a few days after Roosevelt was inaugrated on March 4, 1933 and devaluation of the U.S. dollar that was then tied to gold.

Financial Crisis - 1929 Repeated in 2009

Indian Perspective

November 2008 Global Meltdown 1929 Repeated... Stock Market is at all time low and everyone is discussing about Global Meltdown and its all possible effects on Indian economy and Indian Investors. Fear has taken toll over Greed and now everyone is worried with one Common Question – What’s NEXT?

Stock Market is always acting as a barometer of any Economy. Current level of stock market has pushed us to the year 2006 where Sensex was at the level of 10,000. It took 28 years for Sensex to reach at the level of 12000 in year 2007 and Sensex took only one year to reach at the level of 21000 from 12000. What happened during 2007 to 2008? Was it over optimism? The current downfall of Sensex is attributed by unprofessional practice and misjudgments of so called Master Brains. Analysts say that the current global meltdown is similar to Great Depression of 1929. Let's look at great depression and check its similarity with current slowdown. World war in any case is root cause of any In 1927, Britain ran into trouble with its gold development or devastation of economy. The freeing standard again and Ben Strong lowered US of capital from government to use to commercial use interest rates in sympathy for a second time. Following World War 1, caused commodity price to This ignited the boom into the speculative frenzy inflate. In 1920, Ben Strong of the US Federal Reserve that brought the market to its peak on Bank of New York raised interest rates sharply to September 3, 1929. It was like pouring gasoline prevents inflation. This caused a recession and the stock onto a fire? the flames rose up, no lasting fuel market to fall. Once hard assets like commodities and was added, but the economy sure looked great. Real estate were no longer rising in price, money began Ben Strong died in October 1928. George to pour into stocks and bonds. The Dow started Harrison, his successor immediately lobbied for climbing from its low at 63.90 in 1921 and rose 150% higher interest rates to cool the speculative over the four years to 1925.fervor. Rates were finally raised 1% in August of 1929, but by then it was way too late. The Dow It was in 1925 that Ben Strong made a secret peaked at 381.17. The market and the economy commitment to Montague Norman, Governor of the had buoyed itself from one source of hope to Bank of England, to help England reinstate the Gold the next for a whole decade. First it was the end Standard. This action would later be shown to have of war? related inflation and booming exports for undermined the British economy but the Pound had war reparations, next artificially low interest been the main medium of international exchange at rates in 1925 and 1927 and booming exports that time and it was felt to be in everyone's interest to due to a reduced value of the Dollar vs. they have it be exchangeable for gold. With moral support Pound. There was major tax reductions from the US Treasury, Strong chose to help strengthen instituted by the Republicans under Hoover and the value of the Pound by depressing US interest rates. Finally in June of 1929 an international accord This depressed the value of the US Dollar and caused was struck with the Germans (albeit short? lived) the already robust economy to boom. It was suddenly over the financing of war reparations, a major cheaper to borrow money to invest in the stock market issue of the decade.(Called margin investing).With artificially low interest rates and a booming economy people and companies were more apt than ever to invest in grandiose business expansions and over? Priced stocks. Mergers and acquisitions soared.

These elections will decisively influence the course that India takes. There is a fundamental difference in the vision of the BJP and the Congress. The Congress is directly focused on improving the lot of the common man through the government machinery. On the other hand, the BJP's focus is on turning the country into a global economic power. Welfare of the common man is essentially seen as a by-product of economic growth.

As per Economic Survey data, GDP growth fell from 6.4 per cent during the Congress-Janata Dal rule in 1992-98 to 5.6 per cent during the first five years (1998-2003) of the BJP-led rule. Though the growth rate for last year is an estimated 7-8 per cent, it is not exceptional considering the 7.8 per cent growth logged in 1996-97 during the Congress rule.

The employment scene is no better. According to the Economic Survey, employment growth rate in all the sectors was 2.9 per cent a year during 1983-88 — before economic reforms, that is. It declined to 2.5 per cent in 1988-94 and further to 1.1 per cent 1994-2000.

The twin objectives before both the parties are to reverse the declining rate of economic growth and employment generation. At present, the tax-GDP ratio is about 14 per cent. The Congress aims to raise this to 18 per cent. The party says that it will give special attention to government investment in agriculture and employment generation. Public investment will be the engine of growth. Every rural household will be provided a minimum 100 days' employment a year through government schemes. It is doubtful whether this government-based approach to enhance people's welfare will succeed, as the past record has not been encouraging.

In the 1980s, the then Prime Minister, Rajiv Gandhi, had publicly admitted that only 15 paise of every rupee spent in welfare schemes reached the beneficiaries. The schemes now sought to be promoted may face a similar fate. Yet, the Congress' heart is in the right place. It is directly focused on welfare of the common man.

The BJP, on the other hand, seeks to secure people's welfare by promoting schemes and those sectors of the economy with large employment potential. It proposes to inter-link rivers and, thereby, supply water to many arid regions. This, the party feels, would lead to increased agricultural employment. It also proposes to promote sectors such as tourism, textiles, handicrafts, forestry and watershed management, which have similar job potential.

It is assumed that growth of these sectors will spontaneously lead to growth in employment. This may not happen because this growth can happen using capital-intensive technologies — tractors and excavators for watershed management is a case in point. The BJP is looking to target those sectors which beget not only higher economic growth but also create jobs.

The two parties seem to have entirely different approaches to people's welfare. While the Congress wants to secure this by increased outlay on government-led welfare schemes, the BJP wants to promote labour-intensive sectors.

Similarly, both have committed to raising the growth rate to 10 per cent, but again the strategies are different. The Congress has said that it will use the burgeoning foreign exchange reserves for public investment in infrastructure, and so on. While it has promised to contain the revenue deficit, there is no mention of the fiscal deficit. The party wants to keep its option to borrow or print notes and increase public investment open, but is committed to reducing government consumption. This policy can lead to increased fiscal deficit but may keep revenue deficit under control.

The BJP, on the other hand, has put the private sector at the centre of its growth strategy. It wants to make the country a global manufacturing hub. The large labour supply, the party feels, will keep wage rates low and make is profitable for MNCs to shift their manufacturing base to India. Paradoxically, low wage rates are being heralded as economic strength. The BJP has also said it would raise Indian companies to multinational status and help them establish global brands.

The BJP's economic vision is outward looking and that of the Congress, inward. While in the Congress' agenda the government is in the driver's seat, it is the private sector in the BJP's. The results of the election will decisively influence the country's position in the world economy.

If the Congress forms the government, the country will interact less within the world economy. The thrust will be on increased public investment by mobilising domestic sources. If the BJP comes to the helm, one can expect a much more aggressive India, helping companies capture more world markets and compete with the West.

It is reported that, to help oust Modi (Gujarat's BJP CM), two arch "rivals" -an understatement-Shankarsinh Vaghela (formerly of the BJP and now a congress man and Union Minister in the Centre and Keshubhai Patel, still reslessly in BJP and a former BJP CM of Gujarat, are contemplating joining hands. All three -Modi, Vaghela and Patel - have come up from RSS ranks where they were groomed as 'swayamsewaks'.

What Vaghela, once a hard-core BJP leader, did in the past is recent history. He induced several other BJP MLAs - many of them RSS swayamsevaks- to rebel to grab power as CM of Gujarat. The tricks or methods he adopted are also not forgotten - taking the herd of MLAs to resorts to avoid being outbidden etc. He did succeed for a short time but lost the coveted position soon. Out of frustration, he ditched the BJP and joined the Congress. The Congress, of course, is like Ganga. Anyone joining it is automatically rendered pious.

Vaghela, whom Congress ranked as a communalist and an RSS man -which is the biggest sin from Congress point of view, overnight became a secularist and was not only welcomed into the Congress but even made Gujarat Congress President. Even though, he failed to help Congress improve its standing in elections, yet he was made a Central Cabinet Minister in UPA Govt. There are several such instances of those regarded as arch communalists joining the Congress Ganga and becoming pious secularists and getting plum positions like Sanjay Nirupam and Narain Rane of Shiv Sena. No one is surprised when hard-core politicians play such games. Politics is expected to be a dirty game of power grabbing.

But I do feel sad and surprised when people who have been swayamsevaks in RSS play such games. RSS is supposed to inculcate discipline, high morality and character and spirit of selfless service amongst its cadres. People having association with RSS are expected to be role models in Society whatever the so-called secular political parties may say about them. One simply does not expect RSS to have produced models of the like of, say, Vaghela. So one cannot help feeling that RSS has strayed from its core objectives. Even though it seconds cadres to BJP it is expected to remain apolitical. Yet lately it has behaved like the controlling organization of the BJP and interfered and tried to steer the BJP which it is not qualified to. It even suggested that Vajpayee, when he was the PM, should retire and make room for someone younger.

It played a dominant role in the controversy surrounding Advani over his Jinnah statement. Some senior RSS leaders sought to assume the role of directors of BJP affairs. Needless to say, all this resulted in confusion in BJP and caused incalculable damage to it. If RSS has to retain the respect and good-will of the sections of the Society who regard it as an organisation for some high ideals, it has to redefine it role vis-a-vis BJP. I believe that relationship between RSS and the BJP should be like that between a university and its alumini. A university equips the alumini for career and life but does not interfere with what they do once they leave he university. Like-wise, RSS having trained and guided some BJP cadres, should not expect to direct them in their political career.

What would you mean of CEC of india. It is Chief Election Commissioner (CEC) of India.Now a day, N Gopalaswami is a CEC of India. Before few day a controversy is happen in EC.
It is a story of a high profile drama, something which is related to the top constitutional posts. A few days back the Chief Election Commissioner of India Mr. N. Gopalaswami has recommended the President of India removing one Election Commissioner from his post.
THE Election Commission (EC) is a constitutionally empowered body in India. Like the Parliament, the administration/government, the judiciary and the armed services. The Chief Election Commissioner (CEC) enjoys the status of a Supreme Court judge and can be removed from office only through impeachment by Parliament. Despite this, CECs of India used to play second fiddle to the powers-that-be for several years after the formation of the Republic of India. After all, anything uttered against corrupt lackeys of Jawaharlal Nehru those days was considered to be an insult to the nation. Even the national flag was cunningly made to resemble the Congress party flag. Any disrespect to it was synonymous with insulting nationhood. Political heirs of the ’father of the nation’ - MK Gandhi, treated the CEC office as a sinecure position. It came handy to reward Indian Administrative Service (IAS) officers, after a whole career in bureaucracy, in recognition of their exemplary service (to the powers-that-be)!
The situation changed for the better (or for the worse, according to one’s viewpoint) during the reign of TN Seshan as the tenth CEC for a full six years from December 1990. He too was a typical file-pushing IAS officer, enjoying vast powers. He had been a director of the Ministry of Atomic Energy; joint secretary of the Ministry of Space; secretary of internal security and the Ministry of Defence – all without any technical expertise or initiative! He rose to the topmost IAS position of cabinet secretary before being rewarded for his ’exemplary service’. However, Seshan turned out to be a sort of St Thomas Becket, who was a playboy buddy of King Henry II and was enthroned as archbishop of Canterbury by the prince only to keep the position under the palace’s thumb. (Becket was eventually assassinated in the Cathedral by the king’s helmsmen; he had become too duty-conscious and engaged in conflict over the rights and privileges of the Church.)
The situation changed for the better (or for the worse, according to one’s viewpoint) during the reign of TN Seshan as the tenth CEC for a full six years from December 1990. He too was a typical file-pushing IAS officer, enjoying vast powers. He had been a director of the Ministry of Atomic Energy; joint secretary of the Ministry of Space; secretary of internal security and the Ministry of Defense – all without any technical expertise or initiative! He rose to the topmost IAS position of cabinet secretary before being rewarded for his ’exemplary service’. However, TN Seshan turned out to be a sort of St Thomas Becket, who was a playboy buddy of King Henry II and was enthroned as archbishop of Canterbury by the prince only to keep the position under the palace’s thumb. (Becket was eventually assassinated in the Cathedral by the king’s helmsmen; he had become too duty-conscious and engaged in conflict over the rights and privileges of the Church.)
It created one constitutional problem, as it was the first of this type. The timing of this event is the matter which is making it worse. Around three months are left for the CEC Gopalaswami to the post of the Chief Election Commissioner and his recommendation has given the strength to the opposition parties like BJP to blame the UPA Government and put them under scanner.
BJP was against the appointment of the Election Commissioner Navin Chawla, from his appointment time only. He was blamed to gain funds from some leaders of Congress Party, in the name of the trust running on the name of his Misses. BJP claims that he is suppose to close to the Congress Party of India and thus they shout against the appointment of him for the post of Election Commissioner.
The recommendation has created a situation of panic for the ruling UPA Government in India. They can neither accept this recommendation nor are they in a stage to refuse this. It was sure that due to the seniority Chawla was supposed to become the CEC after the retirement of Mr. N. Gopalaswami.
The time of the recommendation made by Mr. N. Gopalaswami is a matter of concern, as people are seeing one sort of attraction towards one party behind this decision. Although CEC Mr. N. Gopalaswami has denied any report of this type. He said that BJP is not the reason behind his decision rather it is his personal opinion based on the working pattern of Mr. Navin Chawla.