Tuesday, February 17, 2009

What's up with that?

We've all seen the news reports of the global economic crisis. Banks, retail businesses, there are no exceptions, every industry is feeling the pinch. Even that king of excess Donald Trump has three casinos filing for bankruptcy for the third time. It's been instructive, at the world economic forum at Davos we learnt that 40% of the world's wealth has been lost. Where did we lose it, under the couch or maybe in we forgot it in our pockets when we did the laundry. The reality is, part of the reason we are in the trouble that we are in is due to a lack of responsibility from the money people, partly through conspicuous consumerism and poor leadership.

Banks have been promoting ways for people to spend money that they don"t have, credit cards with punitive charges, loans on "sale", business' offer buy now pay much later, and keep paying. It's a sad morass and an even worse commentary on our ability as humans to avoid reality. As my old granddad used to say, if you don't have money, why are you going to spend it?

In Trinidad we have our own version of excess. One of the largest insurance companies has hit that wall. This blog was started with a question as to one of the projects funded by this company. It caused quite a stir in some quarters, who knew that anyone read this blog, until that. Anyway, this company has expanded into all manner of things, owning majority shares in the largest bank, an alcohol company, things not related at all to the insurance industry. At the head of this debacle, someone who has taken no responsibility at all. Someone who is basically being left with his personal wealth intact while the taxpayer via Government intervention is bailing him out. It really sticks in my craw, not that I object to the Government moving in and rescuing them, it was the responsible thing to do. This way we avert worse, if the bank had fallen we would have been in deep shit.

There are no easy answers to these issues, it will take a lot of time and patience, many people will go through a really hard time but it's up to us to find the light at the end of the tunnel.


Gabriela said...

I guess all this is consequence of living beyond our means. I see this as a universal issue: a person earns 1,000 and has a credit card with a 1,000 line. That makes lots of people think they earn 2,000, and therefore spend the whole 2,000.
But the bubble popped... and we are all suffering, even those who never had nor used a credit card.

Coffedude said...

now want to read that old post. Going to look for it. Would help if you post a link!