From
the Straits Times, 24th March 2009:
"No 'quick fix' on the horizon" by
Christopher Tan, ST Senior Correspondent"AN OLD joke about former American president George W Bush goes like this:
During a golf game, an aide had rushed over to Mr Bush and reported: "Sir, we've just had our first Brazilian casualty in our war against terror."
To which, Mr Bush, looking suitably mortified, let out an "oh no!". Then, pulling the aide aside quickly, he whispered: "How many is a brazilian?"
It was only a joke of course (I hope), and it's funny because of Mr Bush's seeming predisposition for gaffes.
The current world economic situation on the other hand is real and is no laughing matter. But how many of us really know how many is a "trillion"? (It's a number with 12 zeroes behind it. In other words, 1,000 billion.)
This is the amount the US Congress has approved to rescue its ailing financial institutions (US$700 billion). Separately, governments the world over are dishing out billions upon billions in taxpayers' money to do likewise.
The question is: Why?
Why are we rescuing institutions most responsible for the mess that we are in? Why do these ailing institutions take up the lion's share of bailout packages - in the case of the US, close to three quarters?
Why should this be so, when they account for far fewer jobs than the manufacturing or agri sectors?
Does the world need more investment bankers, derivative traders, insurance agents or gamblers in disguise?
Going by the rescue plans and their chief beneficiaries, it would seem so.
This is going to turn out badly.
AIG's now infamous bonus saga is just the first sign that throwing good money after bad is not going to solve anything, much less teach the fumbling financial sector the follies of its ways.
Taxpayers' money would have been much better spent on the real world, where real people work in real jobs making real things.
Not spiffy dudes in Savoy Row suits and $100 haircuts making margin calls, packaging predatory loans to unsuspecting individuals, and devising devilish instruments that no one understands - as events have proven - not even themselves.
Think of the High Notes 5 and Minibond notes that relieved many a retiree of their life savings recently.
Then, think of the easy loans banks plied when the bulls were charging - given inane names like Easi Money or Eazi Cash. They were practically forcing cash on consumers. And at the first sign of trouble - round about third-quarter 2008 they ran for the hills.
Now, when businesses are in actual need of financing to stay in operation, the very same financiers become all reluctant, citing judicious policies when none existed before.
It is sad how this sector has been allowed to flourish, to the detriment of others.
The strastospheric remuneration of the financial sector has lured a whole generation of bright and promising young men and women into the dark side. These people could have been brilliant doctors, engineers, inventors, researchers, and last but not least, teachers.
Instead, they now sit behind multi-screen desks making money from nothing. And the world is no richer for that. Except for the suited minority, no one is.
Yet, we are bending over backwards to ensure they still have their Mercedes-Benzes, designer studios and yes, fat year-end bonuses.
The late Akio Morita, founder of Japan's Sony, once said that real successful economies are those that make things. It may appear too simplistic a view – and perhaps a tad biased – but there is undeniable wisdom in it.
The US could have devoted more money to help crank up its auto industry or to irrigate its parched farming sector. Or it could have invested in areas which have perenially needed attention: the education system, inner-city housing, medical welfare.
Or even alternative energy.
The hundreds of billions would then have helped so many people with real needs.
But like most world governments, the Obama Administration seems to have succumbed to the temptation of a quick fix, by granting so much money to so few.
And unfortunately, a quick fix ain't on the horizon. Not when the very institutions which triggered the world financial meltdown are propped up and nursed back to health."
While somewhat over-generalised, I have to agree with some of his points.
How about you?
On a friday night, guess what flew into my house?
Apparently my mother thinks of bats as bad rodents that should be exterminated like rats. It took quite a bit of convincing to quell her fears, although the bat did take a dump on her ornament hat hanging in the house.
On a lighter note, I made kimchi for the first time in my life! Thanks to Maanchi's recipe!
