Executive Pay: The Curious Case of Carlos Ghosn’s Arrest
February 12, 2025
Introduction The last decade has shown rapid development in the information technology and its application. This has helped changed the way we look at the world as well as the way business is conducted. Both business and trade have gained under the wave of information technology with improvement in efficiency, productivity and bottom line. Productivity […]
According to many respected commentators like Nouriel Roubini and Joseph Stiglitz, the Global Economy is facing severe headwinds which can culminate in a “Global Perfect Storm” in beginning 2013. The term perfect storm refers to the coming together of extreme weather conditions that culminate to produce a storm of such a magnitude as never seen […]
Introduction It is very important for an organization to have well defined objective. A well-defined objective facilitates development of strategies and policy thereby creating value for customers. Operation Strategy Operational strategy is essential to achieve operational goals set by organization in alignment with overall objective of the company. Operational strategy is design to achieve business […]
The picture of Aylan Kurdi, a six year old Syrian refugee who died when his boat capsized as his family was illegally migrating to Europe shook the world in 2015. Germany and most European countries opened their borders to refugees from Syria, Iraq and Turkey. Almost everybody considers it a great humanitarian gesture. Nobody should […]
The world is facing a scarcity of water. Each year about 3.4 million people die due to the scarcity of water! Several million more fall sick due to the poor sanitary conditions of the water supplied. The current situation is proof of the fact that the global water supply is not being managed properly. Many […]
The previous article in the module introduced the global economic crisis with a brief overview of the causes. This article looks at the causes of the global economic crisis in depth.
For starters, the global economic crisis carries a distinct “Made in the USA” tag which means that the origins of the crisis are to found in the reckless lending and risky banking practices of Wall Street.
What exacerbated the situation was that the globalization of the world economy meant that the crisis was not restricted to the United States alone and hence the world economy took a beating as a result of the crisis.
The point here is that if one lives beyond one’s means, sooner or later the debts come due and the financial reckoning day would mean that one is either forced to pay up or go bankrupt.
When this happens at the individual level, it usually results in foreclosure of homes, being declared bankrupt and hence unable to pay the credit card bills etc.
When this happens across the economy and involves corporates, banks, governments (local, regional and national), and the net result is a credit crunch which in other words was the name given to the global economic crisis.
The point here is that we live in a world of limited resources and hence the paradigm of growing forever needs a rethink as there are limits to which we can use the resources. This is another aspect of the crisis which has been noted by some commentators.
To sum up, there was a convergence of different forces (economic, social and political) which resulted in a “perfect storm” of economic and social calamity. Hopefully, the crisis should serve as a warning to policymakers to promote sustainable business practices and for individuals and families to not live beyond their means.
The bottom line for any debt based economic system is that one can only postpone the day of reckoning but cannot go on forever in the expectation that the debts would not come due.
In conclusion, this article provided a detailed description of the factors that caused the global economic crisis and the subsequent articles would look at the various casual factors along with some recommendations on how to resolve the crisis.
Your email address will not be published. Required fields are marked *