There are some aspects that cannot be left behind when discussing issues surrounding economics. “Economics, history, political science and power are not separable. That is; politics has a hand in the control of the economy. Similarly, the power-history of different nations also determines the economic status.” This is one of the facts that are not debatable.
Most of the countries that have a strong political background are also deemed to have a stabilized economic system. A stable political environment creates a platform for successful economic negotiations. In the recent times, there are some issues that have cropped up. The issues are related to the state at which countries related with reference to political allies. Despite the fact that economic recession occurs time to time, the most stable countries are viewed to partake a common standard (Shah 36). This means that the global economic recession affects some countries than others. It depends on the political stability. Ideally, most of the countries whose political systems are stable are mostly the developed countries. However, the developing countries are characterized by unstable governments. Ideally, this means that there are myriad self-interests that interfere with economic negotiations. Some of the economic negotiations being discussed in this article include the agricultural trade negotiations.
Most of the largest and most influential financial institutions are founded in the developed countries. For instance, when the economy goes through a boom session, the financial status most financial institutions bubble out. However, during the recession period, most of the financial institutions are faced by financial constraints. That is; the supply of money to the economic channels is compressed. That is; the financial institution is more likely to collapse especially during the recession period.
However, this does not affect the global economic system equally. It is essential to identify with the fact that most of the wealthiest nations take advantage of the situation to create business within the recessed economy. These subject countries have been active in processing bail-out packages. In addition, the countries engage in drafting ‘rescue packages’ with reference to the large financial institutions and banks across the world (Shiller 24). Most of the missions carried out by the wealthy nations with the intention of gathering more profits. Economic terms refer this as the super-normal profits.
Most of the bail-outs drafted and executed towards the financial institutions during the recession period are deemed to be hypocritical. They create more complex situation than the economic nature provides. According to prominent economic analysts, this becomes a profit privatization scheme. This means that it becomes hard for the small businesses, as well as, poor people to access funds for them to invest (Shiller 24). The gross result is that the financial crisis becomes vast than expected. The whole issue of political stability and power becomes the dominating issue with the global perspective of the economy.
Conclusively, there are some factors that are closely related to the economy. Despite the fact that economic recession affects the entire world, some of the member states are more prone to oppressive measures taken by more developed nations. Most of the countries use policies such as taxation and duties to reclaim the economy. For instance, the United States in the recent economic recession period used the tax revenues to reinstate the economic status before any other infrastructural development was carried out. Most importantly, we conclude that economic stability is determined by the level of poverty and inequality among political regimes. However, factors necessary to eradicate these issues are less discussed. Therefore, the problem becomes repetitive since no solid solution has been issued.
Shah, Anup. "Global financial crisis." Global Issues 25 (2009).
Shiller, Robert J. The subprime solution: How today's global financial crisis happened, and what to do about it. Princeton University Press, 2008.