From our own correspondent: Global economic crisis hits home

Global ecomonic crisis hits home

09 October 2008 16:32  [Source: ICB]

The global economic crisis hits home

I grew up in a small town called Bingley, in West Yorkshire, in the UK, where there are two major employers - the head offices of a building society (an institution to help fund property purchases) and a clothing business.

My late parents worked most of their working lives for the Bradford and Bingley Building Society (B&B) and I worked there during the summer when I was student, to pay off debts built up through excessive drinking. I was an arts student, thank goodness - none of this obsessive "grow old too young" nonsense of MBAs and other business degrees that are serving very little purpose at the moment. You'd be better off staying at home and writing poetry.

In the financial maelstrom, you might have noticed that B&B has been partially nationalized by the UK government.

This used to be a dull but worthy lender that became more aggressive and, like most of the rest of us, didn't believe that there was a down as well an upside when we were all caught up in the economic supercycle.

Before the nationalization occurred, 370 jobs were axed, which will greatly affect Bingley's economy, from the direct job losses, of course, to the shops and the restaurants. More jobs are at risk among the remaining 3,000 employees.

My dad worked in a coal mine, fought in the Second World War, returned from the war to work on the railways and then spent the rest of his working life as a caretaker (or a janitor as the Americans have it) at the building society. If he were still around, he could have been out of work - but exactly how much of the blame for the crisis would you have apportioned to him, Mr. Paulson?

Multiply the impact of job losses around the world as other banks and businesses fail and this means much less chemical demand - from the plastic packaging used in restaurants to canceled bigger-ticket purchases, such as automobiles and TVs. We need to be looking hard at demand-growth numbers in an attempt to contemplate what this will mean for all our businesses - whether we work directly in the chemical industry or as service providers.

But the bigger tragedy is that real people, not those with fantastic salaries and parachute payments who are responsible for this financial mess, will suffer greatly. These are real people who deserve protecting because they had no idea of the potential scale of the crisis we are now confronting.

By: John Richardson
+65 6780 4359

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