Why So Down? Forces Behind Global Recession

Today may be the first day of Spring, but even with warmer days ahead of us, it's the chill of global recession that's still on my mind. However, come to think of it, the timing of this entry isn't so awful, since our understanding of the forces behind the recession definitely could use some Spring cleaning. That in mind, here's today's question:

What exactly has brought us to a global recession?

Now an easy and typical answer would involve pointing fingers, but since everyone else has been doing just that, and because I'm not interested in wasting your time or mine, let's not settle for relegating the use of reason to nothing more than the blame game. Beside, deep down, I don't accept the argument that corruption and lack of corporate oversight are the root causes of a global recession. Incidental magnifier, yes, but root cause, no way. Something else must be going on, so with emphasis on the word global (just in case I haven't made that clear enough), let's take a look at one of the most important statistics regarding our world's economy, its population.

Well, not bad, the human species seems to be as burgeoning as ever. Growth rates are down somewhat, but still decently strong. In fact, some predictions even go as far as to place the world's population between 9 and 10 billion by the year 2050. So from the looks of it, all this seemingly unfettered growth should be amazing for stimulating markets. I mean, realistically, selling products or services to a growing consumer base should make sales and ROI no-brainers. Why, oh why then, are so many feeling the pains of unemployment and foreclosure? Quickly, before we submit to short-circuiting our inquiries and blaming corporate fat-cats, let's revisit the above graph, weighted this time by demographic consumption factor.

Now finally we a see a different story: a world with stabilizing consumer demand. How can this be so? Well not all consumers spend equally it seems, and the spread between the developed and developing world is as wide as 32 to 1. Additionally, it just so happens that the highest consuming continents (Europe and North America) also happen to be those with the lowest rates of population growth. In Europe's case it's actually declining. Though the reasons for this correlation between large consumption and low population growth are outside of the scope of today's discussion, it seems we finally have arrived at some proper exposition for a global recession.

But the consumption graph also seems to indicate that this slow down has been going on for quite a while. Why then are we only just now feeling it? Ah, enter the treachery of massive greed. Because you see, it seems that investors and corporate management, unsatisfied with natural widespread declines, began to fabricate growth in ways that convinced us we were still in times of boom. Thus through the odd combination of cargo cult corporate accounting and a pervasively looseness in lending, nearly every market in America has not only been dampened but severally negatively affected by the global recession. Even worse however, have been the actions of the US Government which in turn has thrown even more money into the hands of corporate elites, who themselves are fully aware of no immediate recovery and have transfigured bailouts into nothing more than an exit strategy.

But wait, before we believe that corporate greed is the real reason behind our global recession, let us remind ourselves once again, that it has only been a symptomatic aggravator and not its impetus. Thus, the global recession will persist despite our attempts at regulating the financial system and easy gains aren't likely to appear until the rate of worldwide consumption can bolster them.

Now I'm left to ask, how do we deal with it anyway?