The entrepreneurial spirit in all of us wants to believe - we will overcome.

Yet, in the pit of our stomachs there’s a nagging gut feeling that political leaders and economic pundits have been less than forthright about this historic global meltdown and what truly lies ahead, while a big black hole sucks up our precious tax dollars in bail-out after bail-out.

Our cynicism grows when we recall how not long ago our corporate leaders would chastise governments to “get out of our boardrooms”.

Now it’s “come on in and give us the money,” as fat-cat Wall Street players, at the helm when the crime of Casino Capitalism was committed, now gobble up rescue dollars with obscene bonuses and pay, while employees and shareholders lose it all.
It blows the mind that some of capitalism’s largest financial powerhouses are now nationalized, government-run firms.
Meanwhile, “disgusting” is the only word to describe greed that lives on, even as a cleansing sweeps capital markets around the globe.

In Washington, rioters took their anger to Capitol Hill, where they loudly interrupted recent hearings by the House financial services committee into the US $165-million bonuses paid to top AIG brass, after $173 billion of taxpayers’ money was pumped into the ailing insurer in four separate bailouts.

Word is: nine of the top 10 bonus recipients have agreed to pay back the money. And so they should. Here in Canada, there’s also growing unrest over the blatant unfairness as socialism for Bay Street and Wall Street rages on, while it’s brutal capitalism for Main Street. An example is how one of Canada’s worst managed companies, Nortel Networks—now in bankruptcy protection—is paying out $7.3 million in executive bonuses so key personnel won’t leave, after senior brass already walked away with fortunes as the ship went down.

Courts in both Canada and the U.S. granted Nortel the right to pay out these fat-cat bonuses to three unnamed executives in Canada and two in the U.S. That’s after another 26 employees were approved to receive a portion of a US$23 million program designed to retain senior managers.

At the same time, thousands of Nortel employees are being denied severance pay, while they’ll be lucky to ever see a dime of their pension money.

Bottom line is the misery is on growing on Main Street, where 117,000 Canadians filed for bankruptcy in the 12-month period ending January 2009 - up 15.8 per centfrom a year ago, according to the Office of the Superintendent of Bankruptcy Canada. In the same month, the number of Canadians filing for employment insurance (EI) benefits jumped above the 500,000 mark.

As to whether we’ve hit bottom and will bounce back, or the worst is yet to come—depends on whose crystal ball you believe.

Bank of Canada Governor Mark Carney says July will be the turning point. But Carney’s predecessor, David Dodge, blew cold air over the hopes of a recovery with his comments: “I just don’t think now” as things have developed between December and March that one can be quite so sanguine that the world is doing to recover quickly. And if the world doesn’t recover quickly, it’s very, very difficult to see Canada recovering quickly.”

His comments ruffled the feathers of Prime Minister Stephen Harper, who’s digging deep into deficits to spend our way out and still sports those rose-coloured glasses with his remarks that Canada “remains in a relatively good position compared to other countries.”It was Harper who like so many others refused to utter the ‘R’ word ?

Even when all his capital markets were crashing and investors losing fortunes.
Now it’s not the ‘R’ word our leaders should fear, but the ‘D’ word.

Depression. Some are even predicting the ‘GD’ words. Global Depression.

So, just how far deeper must economies sink before a recession turns into depression?

Technically, a recession is two consecutive quarters or six consecutive months of negative GDP (gross domestic product) growth.

You may recall the recession of 1980s and the early 1990s. And now, after so feverishly denying it, our leaders have officially declared the U.S. and Canada is in a recession.

A Depression is far fiercer. You need a decline in real GDP that exceeds 10 per cent, or a downturn that lasts more than three years, according to the experts at The Economist.

We certainly suffered a Depression in the Dirty Thirties, with GDP in the U.S. falling by 30per cent from 1929 to 1933. Output also fell 13 per cent during 1937 and 1938. But that slump, at 43 months, wasn’t the longest. The record goes to 1873 to 1879, with 65 consecutive months. Since the second world war, only one of the world’s developed economies technically suffered a Depression and that was Finland, whose GDP dropped 11% from 1990 to 1993. Japan suffered 10 years of a recession in the 1990s, but technically it was not a Depression. Emerging economies, though, have been far more Depression-prone, point out The Economist experts. Argentina and Poland suffered a Depression twice. During the Asian crisis of 1997-1998, Indonesia, Malaysia and Thailand all suffered double-digit drops. And Russian’s GDP shrank by a shocking 45 per cent between 1990 and 1998.

So, can it happen here?
One expert, Canadian investor Eric Sprott, is daring to utter the ‘D’ word. “The trend is down, and there’s not one signpost that says it’s changing yet,” warns Sprott, chairman and founder of Sprott Asset Management Inc., who predicts the U.S. will suffer a full-scale Depression and that gold prices will skyrocket to US$2,000 an ounce.

Others fund managers and top investors are also sounding the alarm bells, warning central banks around the globe are printing their way out of this economic mess and that could set the stage for hyper-inflation.

Let’s not forget it was excessive debt that got us into this mess, finally causing the house of cards to collapse. Now, it’s governments around the globe going down the same dark road, with total debt in the U.S. hitting trillions and trillions.

Mark my words. Cash is king, debt is out and so too is greed. If we are to survive, we need to let the cleansing continue and bring back common sense capitalism that plays fair for all.