Political Economy In The World: Rebirth Or Failure - Essay Example

?Marco Chinico Chinico Freelance Journalist and reporter English 2 Political economy in the world: rebirth or failure? Political boundaries, economic boundaries. Apparently distinct and separate, but actually living in perfect symbiosis. Economic boundaries change abruptly and this is due to the fact that today we have an increasingly evolved world with an increasing number of technological services on offer. If economic borders change so suddenly, also political boundaries should change appearance and travel in parallel within the economic sphere. What happens very often is that the political classes don't change or mutate their philosophy and their way of working to tackle the problems of a country. How to explain this big handicap? Failure or difficulties in solving problems much bigger than us? When the gap between the political and economic border is so huge it is extremely difficult to close and an entire country can enter a deep crisis where growth becomes very difficult. This last major recession began in the United States of America the principle cause of this recession was the massive import of low cost capital from Asian countries. This massive import involved large numbers of the American population who invested in these capitals particularly in the real estate market. This was a risky operation, without any financial guarantees but all done with one goal: to make the best investment at the lowest cost. This led to financial and economic meltdown that has rapidly involved private investor’s banks, credit institutions both large and small and also involving public bodies. From America to Europe and the Far East, the economic crisis has not spared anyone. Today, in 2011, after four years from the beginning of this great Odyssey, we are still trying to understand why it happened? Once many, strong, solid and powerful economies are on the verge of bankruptcy and those that were once small powers are now the emerging economies that are likely to become the new economic powers of the future? There was once China, Brazil, Russia and India: they were poor and subservient to the power of the West. Today the Western world, from Europe to Wall Street shudders. The ransom of poor economic states is about to begin. By 2020 China will have a GDP double or even triple of the USA and also the Eurozone is in danger of being crushed by the Great Wall of China. How is Europe living this situation but especially in Brussels, the seat of the European Parliament? And how is Italy working to avoid the nightmare of a default and get over this crisis? First of all you must know the causes that have weakened the entire European economy. Chinico 2 The cause is to be found in the public debt. A debt so big that it is creating serious problems to many States, including Italy. The debt problem was born many years ago. We can also identify the .origin from the period beginning in the mid-70s through to the 80s. The economic boom of the 60’s in Italy and Europe developed a high gross domestic product. The growth in the labour market, in industry and the increased production in manufactured goods meant an increase in wealth. This wealth brought a greater happiness, stability and confidence. From this there was a greater trust: this word has misled Europe and the rest of the world. The combination of this “trust “and a series of weak governments particularly from the mid-90s onwards meant that there was an increasingly higher level of accepted wastage in the form of public debt. At the end this situation became ever worse and gradually brought a decline to some countries. Italy, Portugal, Ireland and Greece in particular are experiencing a period that is far from idyllic. In Greece the country is collapsing under the crisis: staff cuts including a reduction in State employees, a considerable increase in the unemployed and those employed in precarious jobs and many families have been impoverished. Italy is likely to experience the same situation if it does not make serious structural reforms. The new Government, headed by former European Commission member Mario Monty, should be able to lead the country and its people to a more positive period that has been missing for a long time. Italy also has a large public debt, a problem that began more than thirty years ago. This problem was not affronted by the old political class and with the end of the first Republic the generational change has not been able, for several reasons to deal with this problem and consequently has worsened. What should be done do to reduce this debt? Many ask this question. No doubt the first step, though painful but absolutely necessary is to increase taxes. Towards the end of October, the new European Central Bank President, Mario Draghi, during his first speech as the new landlord of the ECB, told expressly: "the young people will be most affected by the tax increase.” In Italy Mario Monti is thinking to reintroduce taxation on houses and on real estate and recently an important reform has been presented that establishes limits to the right of a retirement pension for members of parliament which would put an end to the privileges such as the caste politics has benefited from for many years. The pension reform is necessary in Italy as in the rest of the Eurozone. Chinico 3 Increase the retirement age is the best recipe to save a Europe in crisis? The Italy is the only nation that still has not risen the age at which you are entitled to a pension, made by other European Nations. Despite the disappointment of workers and trade unions, the new Italian Government is willing to adapt to European allies. Work to produce and bring down the debt: this you want throughout Europe. Sacrifices, sacrifices and only sacrifices. Only solution to drive the default nightmare and defeat the economic crisis. What are the World Banks doing in this moment, to defeat the recession? The public opinion speaks about liquidity crises without more solutions and close to downgrade. The Fed reported that some World Bank decided to demote 50 points on interest rate swap transactions in dollars. A beautiful news that means availability of money, more loans to families and to individuals. Banks that have agreed to undertake this strategic move are the Bank of Canada, Bank of Japan, Bank of England and the Swiss Central Bank. All remaining banks in the world, should take example by their colleagues and do the same thing. In the East what happens? Asian stock markets have suffered a difficult period. In Japan there is a strong of corporate sector crisis, with some companies involved in scandals. Beijing has tried with a huge stimulus program to correct the route, but has also created new problems of inflation; the attempt to raise the average income (or consumption), brought many entrepreneurs, even Chineses, to produce elsewhere, creating unemployment and social tensions. Even in the case of China we can to found the same result as in the USA and Europe: a demonstrated inability to keep the country's economics reins. China, Europe and United States are at the heart of the world economy. Now all rest of the world, except maybe the Kuwait and the Scandinavian North, suffers from a crisis that is not only economic but also political. At this juncture the economic analysts claim that there is an international authority that controls the national economies, checks the value of the coins and takes account of financial movements. This is the only possible solution to have a strong world economically. Until now the financial lobbies that are shaking the world seem to have no other criterion that the numbers and the profit at any cost: no care for the millions of Americans who have lost their jobs or for hundreds of millions of Chinese are treated as slaves; not to mention the policies of aid to poor countries, conditioned by the recruitment of anti-demographic campaigns, sterilization and abortion. This is the difficult economic, financial and monetary world: intricate and unexplained situation. The news on the crisis in many countries, there are handed down from newspapers around the world, the currents of thought of analysts are many but the citizens of the land hemisphere, would like to know the truth and how things really are. Opinions, analyses and Chinico 4 forecasts on the global economic downturn, are very different. The world waits with attention and anxiety the necessary responses. Politicamente Corretto- Italian online newspaper (Rome). Document: Addressing Italy’s High debt, low growth challenge (Report for the attention of Eurogroup). Web 03 dicember 2011, All Print. Corriere Informazione- Italian online newspaper (Caltanissetta). Article: Exchanges and markets: European banks back titles in the bag, evening positive. Writer: Marco Chinico, Web 01 dicember 2011, All Print. Corriere Informazione- Italian online newspaper (Caltanissetta). Article: O'Neill: China will soon become the most powerful of the Usa, Writer: Marco Chinico, Web 21 November 2011, All Print. Asianews- Italian online newspaper. Article: Economic crisis: not just a world power. Web 12 August 2011, All Print. Read More