By Shambhu Sharan
SMU professor Ravi Batra has a way to solve the economic crisis.
“There is a solution to the economic crisis. The solution is not cutting the interest rates. The solution is to raise the real wages,” Dr. Batra told an audience Oct. 28 during his lecture on, “The Current Economic Crisis: What Caused It and Where We are Heading Now.”
Batra, author of five-best selling books, was ranked as the third superstar economist in 1978. He received the Medal of the Senate by the Italian prime-minister in 1990 for his forecast of the downfall of Soviet communism in his book.
Batra explained his forecasts and theories.
“I interpreted this theory in a certain way that definitely there would be the downfall of communism by the end of the century,” Batra said.
Two years later, the Southern Methodist University teacher wrote Muslim Civilization and the Crisis in Iran, predicting that a revolution would occur in Iran in 1979 and the priesthood would take over.
“I was confident that the west and the United States would be caught in a war with major fundamentalist Islam,” Batra said.
Batra said that revolution would come because of a concentration of wealth which would start in two to three years. Economic chaos and political corruption would lead to an unpopular war. Because of a major unpopular war, the major shift would occur in the near future. Before the revolution, we would have major economic chaos, poverty and unemployment.
“About Capitalism, I wrote that due to the system’s fault there would be a tremendous concentration of wealth in the society and that concentration of wealth would eventually bring a lot of poverty and [a] possible, unpopular war,” Batra said. “Before capitalism goes down there would be a revolution.”
Batra predicted Obama as a cause of the new revolution which would start in 2009.
“I think revolution is coming. Mr. Obama is going to bring revolution,” Batra said. “The rule of money in politics would disappear.”
“The new Golden Age will come after the political revolution and economic chaos,” Batra said. “When people’s minimum needs would be provided and standard of living would be better.
“A deep recession is coming. Then new ideas would flourish,” he said. “Once revolution is there, everybody’s minimum standard of living would rise. The economy would flourish and there would be a new golden age.”
Batra notes the major causes of the problem. He blamed Allen Greenspan, who was the Federal Reserve’s chairman, as a person responsible for the crisis.
“I looked at his theory. I looked at all his data. All he was doing, was creating debt in society to create superficial prosperity,” Batra said. “This debt is going to come back at us not in a distant future, in the near future.
“Greenspan allowed people to borrow money rather than giving them wages so that they could spend,” Batra said. “He created an artificial consumer demand by cutting interest rates to the lowest level. That’s what he did in the years 2001 and 2002. This time, we had a housing bubble. “Housing market was slow. Greenspan was in a lending spirit. People had no money.”
The housing bubble led to a debt explosion.
The solution to the crisis is to raise real wages, he said.
“If you raise real wages, consumer spending would rise in a natural way,” Batra said. “It would be a permanent rise in consumer spending.”
Increasing purchasing power can solve the economic crisis, Batra said.
Originally published in Richland’s newspaper, Richland Chronicle, on 10/11/08 http://media.www.richlandchronicle.com/media/storage/paper1245/news/2008/11/10/News/Smu-Professor.Believes.Obama.Has.Economic.Answers-3534650.shtml