Sunday, February 22, 2009

USA 2008~09 = ROK 1997~98?

Is the United States of 2008 and 2009 like South Korea of 1997 and 1998? Not exactly but sort of. 

In 1998, South Koreans were keenly aware that a lack of hard currency was preventing grossly over-extended companies — as well as fiscally responsible companies with reasonable amounts of debt — from being able to pay off their loans.

Though there was some anger over corporate irresponsibility by various chaebol (along with Western financial powers that saw an IMF bailout as a chance to make land grabs and turn Korea Inc into a fire sale), there was also a palpable sense of "we're all in this together." 

To some degree there's a bit of that today in the US, which is reason for the Democrats having so much support for their $900-billion bailout package. But at the same time we're hearing people scream "Why should my neighbor get a mortgage bailout when I don't get anything?"

[above: No matter how many of your auriferous possessions you sacrifice to the Stygian mouth of the gold-devouring demon, it's appetite for your sentimental belongings shall never be sated. Watch as he mocks your misfortune with his malevolent grin. His contemptible countenance truly makes this doleful scribe weep. Truly.]

A bit of news in today's Los Angeles Times underscored another big difference. It seems a lot of people are taking old, unwanted, or unneeded gold jewelry and having it melted down to get the cash value of the precious metal. (The LAT story focuses on Orange County suburbanites, but I've seen commercials here in Honolulu for basically the same service.) 

In South Korea, as the crisis hit, thousands of people lined up to hand over their jewelry as well. The difference? In South Korea, the gold was being donated. The same thing in Thailand as well. 

This is not to say that Americans are inherently selfish (or that South Koreans are easily manipulated by government campaigns). Certainly both countries have a fair share of both types as the crises hit. It's just that as I watch events unfold in the United States I am constantly left with a feeling of déjà vu

I have a feeling I've been here before because I have. McCain's loss to Obama primarily because of financial meltdown caused by business-as-usual incestuous policies between government and a largely unsupervised financial sector is eerily similar to conservative stalwart Lee Hoi-chang's (yi hoé•ch'ang; 이회창/李會昌) defeat at the hands of perennial left-leaning presidential candidate Kim Daejung (김대중/金大中). 

So is the way that President-elect Obama had to guide economic policy in the months before he was finally able to take office (in Korea there were actually calls to amend the Constitution so that Mr Kim could take office earlier than the February 25, 1998, inauguration date).

Frankly, this has left me cautiously optimistic. I'm too young to be an old-timer, but I've gone through this. For me this is Financial Crisis 2.0, and I know I survived the first one. Have faith, wait it out, make sure your local politicians are support moves to do the right kind of stimulus and the right kind of restructuring, and just wait it out.

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