An Economy in Chaos.

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The US economy is in a recession. How did it happen?




An Economy in Chaos

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Part I

Monday, December 02, 2008

Some of the issues which resulted from the Liberian Government's decisions in the late nineteen fifties and early sixties regarding long-term relatively unregulated multinational contracts began to be felt by the early seventies. One such development was the massive failure of the Liberia Mining Company (LMC), a company which was comprised of 40% goodwill from the Liberian Government and 60% capital investment from a number of US iron and steel companies including the Bethlehem Steel Corporation of Bethlehem, Pennsylvania, USA. The socio-economic devastation which resulted in that part of the country when the company shut down its operations would be an issue of concern almost 30 years later when the newly elected Administration was negotiating new mining contracts.

Other repercussions began to manifest themselves in the aftermath of the economic downturn and the backwash effect that hit the local people and the immediate regional communities. The local population was decimated as a consequence of the loss of jobs and community based services. The Liberian government had not developed any fiscal plans to address the aftermath of a vastly distorted local economy when the multinational corporation left. After extracting more than the projected share of valuable iron ore and other intrinsic minerals, the company unceremoniously packed up and left the country. A local paper called the move "The 3Gs – Get, Grab & Go".

The tax base provided by former employees' payroll disappeared from the local economy. Moreover, capital infusion for national projects funded through county government tax contributions to the national coffers was also lost, almost overnight. How the multiplier effect of such a move was not properly anticipated and factored into the Liberian economy's long term performance is beyond me. A few short years later, the forest reclaimed the community that had once been the Liberia Mining Company.

That sad story is now being repeated in some fashion in the US economy almost half a century later. Now we are facing a decline in innovation and creativity.

Food for thought...

Regards,
Preston Williams III, M.Sc. · CPA · CIS 
Former CEO & Managing Partner | 
GBC® Global Services |
PrestonW |






 


Submitted: August 07, 2009

© Copyright 2022 PrestonW. All rights reserved.

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Comments

IanJohnson

it is super crappy, my only hope is that i can publish my book, and then move to alaska

Fri, August 7th, 2009 7:42pm

PrestonW

I believe that things will eventually get better. I guess I'm just an optimist :-)

Sat, August 8th, 2009 5:53am

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