Recessions can weed out the inefficient
Saturday, 20 December 2008
THE governments in Europe and America are becoming bankers either by nationalising the banks or by injecting funds as equities to transfuse blood into thus anemic financial institutions to prevent a repeat of '30s economic depression.
Such bottle-feeding might keep the companies asleep for a while. But, in the long run, I am apprehensive, the beleaguered companies might not garner enough strength to stand on their own feet. They are pursuing short-sighted strategy to stabilise their financial systems to help their economies recover.
For invigorating an economy, winners should always be separated from the losers the way weeds and dead plants have to be cleared for healthy growth of a garden of vegetables.
The American and the European governments are trying their best, with artificial measures, to prevent recession, which is already there.
Recessions can be healthy and necessary. Recessions weed out the inefficient and expose fraud and corruption and close the gate for them for the economy to regrow.
M A Khan
Gulshan, Dhaka
Such bottle-feeding might keep the companies asleep for a while. But, in the long run, I am apprehensive, the beleaguered companies might not garner enough strength to stand on their own feet. They are pursuing short-sighted strategy to stabilise their financial systems to help their economies recover.
For invigorating an economy, winners should always be separated from the losers the way weeds and dead plants have to be cleared for healthy growth of a garden of vegetables.
The American and the European governments are trying their best, with artificial measures, to prevent recession, which is already there.
Recessions can be healthy and necessary. Recessions weed out the inefficient and expose fraud and corruption and close the gate for them for the economy to regrow.
M A Khan
Gulshan, Dhaka