It has become increasingly difficult to keep track of the current trends in the global economy, as economic indicators are subject to amendments, from which the effects of seasonal or exceptional drifts are excluded. Nevertheless, it seems there are signs on the horizon that the recession is steadily slowing down. Furthermore, economic assessments with a positive outcome currently outweigh those with a negative outcome, except for the unemployment rates that are still soaring to record levels. As a result, a large segment of consumers is now unable to spend at the same levels prior to the crisis, subsequently making the need to break the siege imposed by the recession even more urgent in retail markets. This is in order to regain the production levels, and compensate trade exchanges which may lose this year about 10 percent of their value according to the World Trade Organization (from approximately 19.2 trillion dollars for goods and services in 2008). In this regard, the Austrian economist Joseph Schumpeter (1883 -1950) is quoted for having said: “The market system cannot evolve without an outside force”. By “an outside force” here, Schumpeter means the consumers from all demographics and social, cultural and economic spectra. In other words, the Austrian economist considers the “consumer” to be the cornerstone and prime mover of the economy, without whom there can be no consumer market that promotes the industrial and agricultural products, accompanied by special services associated with each offered product. In any case, Schumpeter's dictum agrees with the projections of economic recovery and its resurrection from the ashes of financial crises and the collapse that followed. This is because the parameters of recovery do not stop at ending the collapse at the bottom that the economy has reached: without consumption, the market cannot regain its strength, and without creating jobs, consumption, in turn, cannot grow. Meanwhile, it is noteworthy here that the American president and the Chairman of the Federal Reserve both spoke about the interdependence between growth and employment. They both agreed that while a “shy and modest” restart of the economic cycle may occur, unemployment will continue to drain away any advantages while of course, still threatening the market. This is especially so when Americans have modified their spending behavior and turned into personal savings, instead of relying on personal loans and credit cards. These latter have contributed greatly to the spread of the excess in consumption, something that was one of the causes of the crisis. In fact, the banks themselves are seeking to ultimately pay back the financial aid they had received whether from central banks or from State treasuries. As such, they are rationing their lending, not only to ordinary citizens, but also to institutions and firms. These, in turn, reduce the size of their investments which would have otherwise provided more employment opportunities. Despite the rescue programs and the reduction of interests on loans, (to an interest rate almost equal to zero as in the United States, and to unity in the Euro zone), recession still managed to expand to maximal levels. In addition, private loans are now gone, and those customers who possessed liquid cash have now switched from minimum risk investments to the known risk free public treasury bonds. “In such cases, the State is the only party capable of attracting savings, as a precaution against the possibility that those will not be invested, and of pumping it in the production cycle” (Alternative.fr). The sense of responsibility that led countries – including most industrialized countries and emerging countries – to launch economic rescue plans, and that prompted the International Monetary Fund to help poor countries or those that are threatened by bankruptcy, was twofold. This is because this same responsibility is even a greater challenge to governments, in terms of having to “prove” the feasibility of their programs, especially when the value of governmental economic stimulus programs does not exceed 2 percent of the GDP (approximately equivalent to 11 trillion dollars within the G20 countries). This is while the public deficit consumes about ten percent of this GDP in the G20 countries, according to IMF statistics. As such, governments intervened and played a major role in the private sector, in the financial and industrial segments, forcing its banking system to eliminate any defects and irregularities from their regulations, and to control the risky elements in their investments, as well as enhancing their financial solvencies in a manner that immunizes these banks against any future crises. Furthermore, governments intervened directly in the automobile industry which has requested assistance. As such, governments also forced automakers to restructure their operations, reorganize their assets and abandon certain subdivisions .The car companies also had to design innovative new units capable of competing in the markets. In this vein, governments, which became in some instances direct partners in the companies, played a motivational role to improve these subsidized companies through innovation. Moreover, motivation here means the placement of the economy back in motion, where the “contractor” is pivotal in innovation, creating new products, or using advanced technologies or materials, and expanding to previously unchartered markets. This is unlike the static economy, or the so-called economic cycle according to Schumpeter. In fact, the logic of this novel cycle is based on general equilibrium, where adaptive prices achieve parity between the different economic variables, and where each product is awarded its fair price. Also, this economic cycle is characterized by free competition, private property and the division of labor between the different agents. What is more, innovation actually manages to break the routine relationship between the means of production and consumer behavior. It is for this reason that change cannot happen through the modification of production quantities, but rather through a transformation in the quality of production. Therefore, and again according to the argument advanced by Schumpeter, economic progress cannot take place without boosting the consumption ability of those who are “outside of the market”, and without achieving two primary things: regaining their confidence in the economy, and enhancing their purchasing and hence consumption power.
