Recession

Its all about the jobs, stupid

Even though I am repeating what I have said before, I think it needs repeating because nobody is listening. In a recession or when the economy is bad, the government can take only some actions as the economy is not run by the government but rather by the people. The actions that the government can take are as follows:

Tax cuts – not enough

I had suggested earlier that the government needs to take the following steps to stimulate the economy:

Growth with debt-Keep your fingers crossed

I was surprised to note that Tatas have also borrowed heavily by pledging its shares. Growth with too much borrowed money is very risky. Public invests in Tata companies thinking they are financially sound without realizing that they have borrowed heavily. When I saw Tatas going in for huge acquisitions like Jaguar/Rover and Corus, I was concerned that even if one of them landed in trouble, Tatas could get into serious trouble. With the recession and financial crisis, trouble has landed in multiples. The interest of the common shareholders in the Tata companies could suffer.

There are still some who think before acting

In todays recessionary times, it is clear that people are going to lose jobs. However, before we fire people, some other options should be evaluated.