Tuesday, June 30, 2009

Hamam mein sab…

The global economic crisis has claimed many victims, but perhaps the greatest blow of them all has been to the aura of invincibility of the developed world. Indeed, from the “Asian crisis” in 1997 where the IMF and United States played a key role in advising, cajoling and sometimes demanding prudent free-market economic solutions, to a scenario where an open discussion on the future of the US Dollar as the world’s reserve currency is no longer seen as the talk of fringe communists, the world has indeed come a long way. (And that was a long sentence too!)

So are the days of laissez-faire over? Hardly, in my opinion. On the contrary, this economic crisis perfectly mirrors the fallibility of man – one part optimism, two parts euphoria, a violent dash of lunacy and a tinge of stoicism- not necessarily in that sequence and definitely not in proportion.

The only people who have been laughing their way to the bank have been men like him, him and him. These were the pessimists who decried the “go-go” attitude in the financial markets. To be fair to them, the writing has been on the wall (or on the charts) for a really long time, and even when they tried to voice their opinion, all they were met with was a few yawns of incredulity, or some hand-wringing at the most. Who can fault them for taking advantage of what seems foolish in hindsight?

India itself appears to have weathered this storm with relative comfort. But this has not been due to amazing government clairvoyance or the sagacity of the stock-market seers. The reason for this has been the attitude of the ordinary man – the wisdom of the middle class to save for a rainy day, not spend more than they need and provide for the education of the next generation – an investment that has always delivered handsome returns.

Will these attitudes sustain the consumerist culture? As long as common sense prevails, yes. If they do not, the hope is that society will still function as a safety net to restore the fallen to health. Or perhaps the government will get its act together to provide one, just as they have wisely decided in this instance.

Oh-but what of the title? It has been inspired by this article I read recently. While the motivation to create such an index does make for somber reading, perhaps now all shall agree definitively that we are in the same hot-house. After all, Mr. Market told us so!