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The panicky face of recession
Recession has two faces: real and panic-stricken. The real face displays stock market crashes, dwindling production, decreasing manufacturing and declining demand. But the panic-stricken face is psychological fear.
THE COLLAPSE of the tower of human greed results in recession. It is the fallout of extreme consumerism and faulty market policies. The irony is that human actions led to recession but recession is now steering the world according to its own unpredictable whims and fancies.
 
Recession has two vital faces: real and panic-stricken. The real face displays stock market crashes, dwindling production, falling manufacture and declining demand. But the panic-stricken face is the psychological fear created by the real face of recession. An analysis shows that the ground reality may not be as bad as is projected by the panic-stricken face of the market.  It is the fear that the future may be worse, that holds back every company and organisation from venturing into new financial projects.
 
The scenario is grimmer for IT companies as they are heavily dependent on their head offices in the US and the UK. Fresh graduates are unable to find placements nor have those who had quit jobs at the onset of the recession been able to find new jobs. The transition period for these people who wanted to change their jobs has been really hard.
 
The ramifications of this fear psychosis are also conspicuous in other sectors. Often people ask why there are no placements or job cuts in the media industry even as the recession keeps the news wheel rolling. The answer is that the media companies cannot separate themselves from the market. So, it moves in the direction of the market.
 
Although there is no denying the fact that some companies become paupers, it is also true that zero recruitment, cost-cutting, job cuts, and salary cuts are the measures they take to keep some oil for darker nights. So it may be inferred that the real face gives rise to the panicky face but the latter only aggravates the problem.
 
But as was pointed out by a leading national newspaper, CEOs of many companies have been receiving salary hikes in this time of financial barrenness. Contextually, Obama’s decision to slash the pay packets of op-executives and CEOs in the US is the most appropriate step.  
 
The government of India is giving indications that it will commence many social projects and schemes to mobilise investment and generate employment. This indeed is a discrete step as it will act against the psychological barrier and also help to ameliorate the ground situation. It also deserves mention that it was due to the banking policies of the government of India that recession had not pulled down our growth rate into the negative space as has been the case in many other nations.
 
The ugliest repercussion of recession was felt between January and April when the markets had almost come to a standstill. But change is gradually seeping in and this is reflected in the stock markets. However it is still uncertain whether recession will continue into the next year or not. The different clashing forecasts coming in from different quarters like the IMF and the World Bank leave us wondering how long it will take to be recession-free.
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