If your family is not directly affected by a job loss, then you can count yourselves lucky. In the US, CNN reports that Job cuts exceed 100,000 for the week.

Pfizer, the leading drugmaker in terms of annual pharma sales, and Caterpillar, a heavy equipment manufacturer based in Peoria, Ill., each said they would cut 20,000 jobs. These are the biggest reported eliminations among U.S.-based companies.

Boeing said 10,000 workers, including 4,500 previously announced reductions, would lose their jobs. The company blamed this on dwindling demand for its aircraft.

As the Globe and Mail asked, Large-scale layoffs have started. How bad is it going to get?

This is not the end of the story, because the unemployment would likely not be distributed equally across the globe. Rich countries will try to have less, making the poor countries (starting already from a higher base) face more.

Such policies are bound to increase international friction and conflicts, which of course won’t help economic recovery. As for tyrannies that rely on oil income to bribe their population – Venezuela, Russia, Iran, Saudi Arabia – all saw their income decimated, and many resorted to desperate measures.

That is why at  the World Economic Forum  in Davos, Switzerland protectionism fears dominate.  British Prime Minister Gordon Brown cautioned:

The global economic crisis is no reason to shun free trade.  This is not like the 1930s. The world can come together. I believe we’re in a global economy. You cannot now do without the global institutions that are necessary to make that global economy work.

We can only hope that these major players do take decisions that help all economies to recover, although undoubtedly it will take some considerable time until the recession has abated.

In the meantime, careful attention to the family budget is essential.  Perhaps you may wish to check out books on family budgeting.

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