Recent Developments ...

I guess we are all aware of the recent upheavel in the financial world. There was a lot of media coverage and a lot of people got scared as hunted rabbits. Banks and other financial institutions either started falling like nine pins or were badly shaken up. Personally however I don't know a soul who has been badly affected. It could be plain coincidence or I just don't know enough people.

Now you must be thinking, "Ok! whats the point wise guy?". Well I donot really have a point. Or I should say that whatever I have will probably not be considered much of a point.

Well immediately after the meltdown there were news reports of people who had been badly affected commiting suicide or worse, killing off their families and then themselves. These were people who were just like us. Middle class employees of reputable firms which had ceased to exist. Ofcourse such news shocked us badly.

I will cut to the chase now. Enough beating around the proverbial bush. In India, we have a lot of farmers who are extremely poor. It is not my aim to highlight their plight nor am I any champion of the oppressed. I just wish to juxtapose two similar situations here.

So where were we, right the poor farmers. Now for many years poor and highly debt ridden farmers of India have been resorting to taking their and their family's lives. There are random news articles about these events and some NGOs try and bring their misery to the front pages. Also several times the politicians announce loan waver schemes to the tune of hundreds of crores of rupees. It does little to help the farmer's cause as obiliterating previous debt does not imply that the reason for that debt is removed as well. However everytime such a waver is announced there is a lot of hue and cry against it in the corporate world. Its bad economics they claim.

Cut to the recent "meltdown" and we see many airlines asking the governement for financial aid. And ofcourse everybody is quite ready to admit that what else is the governement for if not to aid in troubled times. In the US, the government already has given massive aid to several ailing banks.

However if you reflect a little, all these loan waivers and aids to airlines are actually indirectly funded by us - the taxpayers. And its us, the middle class, who pay most of the taxes. So I think we need to reflect what is more important - agriculture or aviation.

The finance minister has come up with a brilliant idea - creating a soverign state sponsored fund of $20 billion for shoring up the stock market. What this means in lay man terms is that taxpayers money is going to be used to increase share prices, bringing the sensex back to a rosy red figure.

So millions of poor farmers die, if you provide for them its bad economics and if you spend money so corporate shares rocket thats good economics.

I don't know about you but to me this economics subject looks a bit dicey.