Economic Blues

From reading the newspaper lately, I cannot help but feel a new form of winter blues. Specifically, the economic blues. Article after article sends me into a spiraling depression from which there seems to be no way out.

Woolworths, a company that first began in 1878 (Source: Wikipedia), is closing all of it's stores in the UK, resulting in approximately 22,000 jobs being lost. That is bad enough, but there's more. One of the latest companies to potentially fail is Jaguar Land Rover. Company officials asked the UK government for help (in the form of £1bn over the next 18 months) or else they will likely be forced to close their doors, resulting in 15,000 staff being out of work. Furthermore, if Jaguar Land Rover closes it's doors, there will be huge knock-on effects which could result in the doubling of people being out of work due to Jaguar's closure doubling.

The latest article that I read was citing many high street stores as potentially having to close down in the new year as they may not be able to pay their rent. One person said that what we could expect to see in the new year would be a "bloodbath". Ouch. And how is the UK government responding? By throwing money at the problems.

First of all, similar to the US there is a bank "bail-out" underway. HBOS (Halifax, Bank of Scotland, etc) was forced this year to seek a merger with Lloyds. This seemed to be the beginning of the end for the banking system as we know it. Although, the truth is that it started far earlier with Northern Rock going under.

Most recently, George W. Bush has agreed to provide $17bn to the ailing car manufacturing companies, Chrysler and GM. Naturally, this has resulted in the UK government feeling pressure to provide Jaguar with cash as well. A subsidy of some sort will likely be agreed upon in the coming days, but where does it end? And, more to the point, where are our governments getting this kind of money from?

The UK government's latest venture has resulted in them secretly selling shares in a Atomic Weapons Establishment to an American engineering firm. This was apparently done to raise well needed money and also results in the UK government having no say in nuclear warhead production in Britain. This makes me feel ever so slightly uncomfortable.

Overall, it feels like the governments trying to put a plaster (aka a bandaid) on a gaping gunshot wound. I don't think it will work in the long term, but it might slow things down for now.

For me, all of this has resulted in three major concerns:

1. What does all of this mean for me?
Really, at the end of the day, I think that is what most people are thinking. Will any of the companies I work for go under? Will I be looking for a new job? Do I have enough money saved to get me through this economic downturn? The fact is, no one can really answer that question. I expect, as do many of the "experts" that things will get worse before they get better. All I can do is wait and see.

2. What happens if the government commits too much money?
Let's face it, the government does not have infinite amounts of cash, so how are they going to finance all these ventures? One of the reasons why we got into this mess in the first place is because people spent more money than they had. Is the government doing the same thing?

3. Where do our respective governments draw the line?
By lending money to the big banks, and the big car companies, our governments are setting a potentially dangerous precedent. What happens when other big companies get into trouble? What about the little companies? How does one decide who to help and who to let fall by the way side?

Ugh, sorry if this post has depressed you! Perhaps I should have put a warning label at the top stating that my blues may be contagious????