Unprecedented Imagination - Need of the Hour

Since industrialization, modern world has witnessed the cyclicality of economies many times over. The slowdowns which these bring in are termed as recession or depression depending on the pace at which economies grow or shrink. Most of these we have either been a witness to or have studied. Randomly speaking these range from the great depression of 20s to the last witnessed dotcom bubble burst and now the one which is going on currently. Each of these lasted for an average 2 years. Yet each of these are but a harbinger of economic growth. Each of these also impacted the social, political and demographic structure of society.

Capitalism came out of all these unscathed and with larger number of believers. Often supported by governemnt spending or governments urging people to spend. Communism which people read and quote today, might not be a better choice even this time. Soviet Union broke down and accepted capitalism. Soviet Union is also an example of the fact that communism is nothing short of state funding economic growth while people continue to live in recessionary environment, and in the end both the state and people emerge poorer. China is the sole surviving communist country which has been delivering economic growth. How it tackles this dowturn - socially, demographically and politically is yet to be seen.

What we are witnessing now is unprecedented. Unprecedented because never before have we witnessed a simultaneous downturn of both Wall Street and Main Street, the metaphors for financial markets and indurtial production, that too this sharply.

Never before has the world been under so much of social strife or fundamentalism or terrorism (are the two different?), and these are likely to be fed by weakening economies.

Never before was Mother Earth under peril from warming or pollution and under urgent need for repair. A shift of government focus to economic repair does not augur well.

Never before has financial system implode the way it has now. Collapse, in fact, is the right word. The largest FIs are either no more or have shrunk to less than 10% in valuations. Governments across the world have either been bailing out these haloed institutions or guaranteeing them. And if some economists are to be believed the worst is yet to come.

Governments have been doing their level best by spending and investing. Businesses too have been reassessing and realigning strategies, cutting costs and downsizing. These have been standard reactions to all earlier downturns.

But these are humbling times and unprecedented. And in times like these especially in todays connected and communicating world gloom breeds gloom, often faster. Such times demand unprecedented imagination on part of governments, people and businesses.