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Damned in any case
Why Obama will burn and why recession will last a bloodied decade!
With the dust over the astounding, but expected victory of the Democrat Presidential candidate Barrack Obama settling down, it’s now time for some introspection and rough calculations. In retrospect, nothing could have been better than to see the backs of Bush and his fanatically non-bipartisan group. And of course, in Obama, it’s not just the common American, but the world too at large, which sees a messiah who is out there to salvage the world from the predicament that Bush and his coterie have speciously cultivated. As if the war on terror and its spillover effects were not enough, the gift of a banking collapse and the ensuing recession were like whiplash parting gifts from the Bush regime. Although it is assumed – perhaps correctly so – that despite global endearment, almost all of Obama’s initial policies, quite like Bush, will be focused purely on consolidating US interests, one also has to understand that if the US bounces back, the chances of the world rebounding in the American wake increase magnanimously.
As the cliche goes, easier said than done. Here, in our analysis, we play to the ‘rat’ piper and flout the flute on two Obama fronts – corporate policy and foreign policy. First the evident. Obama has been making quite a bit of noise about restricting the outsourcing business to countries like India. This did make unemployed Americans happy and did succeed in rattling many a nerve in India. Restricting the outsourcing of state departments is fine, but forcing American multinationals to do that? Damned if he can! Especially to the non-upper-crust outsourcing layer. And what do we mean by that?
Of course, upper crust high value luxuriant outsourcing [geo mapping, consulting, analytics, high end software development] would immediately be stopped; and not just because cheaper labour is available alternatively in the Americas, and not of course because of Obama’s bent, but because companies would simply not invest in such luxury stinking consumption.
But having said that, look at the other side of outsourcing too. Just for employing the otherwise lazy and laid-back American citizen who lives on borrowed money in New York or Washington or Seattle, US companies employing standard tele-calling and digitization/net-query handling services [what we referred to as non-upper crust] would have to pay around $3,000-4,000 per month [and that’s a completely conservative estimate]. Compare that to the relative pittance of $200-800 that they generally would have to pay to, say, an Indian ‘outsourced’ worker in Gurgaon or Pune or Bangalore or Hyderabad. Definitely, imposing restrictions on such outsourcing would be a further death knell for both the government owned and ‘non government-owned’ US Inc. [‘Non government-owned’, for post bailout – read post nationalisation – one wonders how many ‘large’ financial and manufacturing institutions would remain truly private].
At a critical corporate-policy crossover level, if one believes that Obama backing a further strengthened bailout for the American economy is reason enough for the US to come out of recession in a year, perish the thought. From painstakingly achieving historical deficits, irrational high credit levels, unbelievably low savings to maintaining the blind belief that markets would take care of everything, the Republican regime has worked for more than eight years to ensure this recession hits worse than Katrina. Irrespective of the trillion dollar bailout [we forecast this to reach three trillion in another eighteen months], Obama will not be able to stop the US economic behemoth that just tipped over dear ol’ Vesuvius. Or he’ll take at least a decade to bring the economy back to the top, as per our estimates. Damned if he can before that!
But does that mean that Obama’s intervention is useless? Of course not. In fact, this recession can not be tackled without government intervention, and that too of all the major nations combined. Plainly put, it’s impossible for ‘market forces’ to work themselves out. If Obama weren’t to bailout, the recession would be the doomsday for what we know as capitalism.
By:- Pathikrit Payne
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