Public money and bailout Essay Example | Topics and Well Written Essays - 2000 words

Public money and bailout - Essay Example The government's argument is based on the fact that if the private companies were not assisted properly, most of the companies will be forced to cancel the service contracts of thousands of workers which will again increase the unemployment problem. In a country like United States, most of the employment contracts are based on the at-will employment types. Such employment contracts grant permission for the employers to dismiss their workers even without citing a proper reason. So unemployment problem will go beyond the grasp of the governments if the private companies were not assisted properly at this juncture of financial crisis. It is under this perception that the governments justifying their action to bailout private companies. "In their valiant efforts to avoid pain now, our governments are not asking themselves how much employment could be generated if the billions they are earmarking could be invested more wisely. The truth, however, is that carmakers were already receiving lavish support from the public purse long before the foundations of the world's economy started to wobble. Between 2003 and 2007, the European Investment Bank gave '6.5bn in loans to carmakers, including companies like Jaguar and Land Rover that prize customers with more money than brains. (Cronin, 2009) "Currently, private businesses and companies around the world, especially in Western economies, have already started laying off thousands of their employees, attempting of course to save themselves from a credit crunch and a looming global recession. The US unemployment figures rose to 7.2 per cent from 4.9 per cent in Dec 2008" (Bureau of Labour Statistics, 2009).Reports from western countries showed that many people have lost their jobs and many are afraid of losing it in near future. The current crisis seems to be deepened from day by day. All the remedial measures taken by the governments were proved to be insufficient to tackle the issue. Nobody expect a magical recovery in the near future. This time recession came unexpectedly to most of the people. The economic pundits were failed to forecast the crisis early enough to warn the people or the governments. The new American administration led by Barak Obama is facing the huge challenge of how to tackle the current crisis and at the same time how to preserve the jobs of the working class. Most of the common people are working in Public money and bailout 3 private companies and hence the governments cannot stay away from their moral responsibility of assisting the common people in preserving their jobs. "According to a recent report by the IMF, growth in emerging and developing economies is expected to slow sharply, from 6.25 percent in 2008 to 3.25 percent in 2009." (Cardozo, 2009) One of the prominent growing economies in the world, India has reported that they are expecting a growth rate of 7.1% though they anticipated more than 9% before the crisis begun. Most of the other emerging and developing economies found it extremely difficult to sustain their growth rate even though the crude oil prices has come down a lot. In order to analyze the depth of the crisis, the current crude oil price