Wednesday, September 24, 2008

A lesson from History

It is said that World War II ended the Great Depression of 1929. This was because of the massive deficit financing that had to go into producing things for the war effort - planes, tanks, ships, etc, etc. in 2 theatres of war - one in Europe and the other one in the Pacific. How much did the US public spend? The consensus seems to be $5 trillion (in 2007 dollar terms, after adjusting for inflation). So when Henry Paulson and Ben Benanke asked for $700 billion from the American people to rescue the world from the next Great Depression, it pales in comparison. America lost more than just money in WWII. It lost many lives and made many widows. 

Yet some are not convinced that this is a fair solution. What it meant was that greedy wheelers and dealers - the investment banks and the people that ran them, were going to be let off. God knows how much cash they have already stashed away. If we want to make the comparison, these dealers are the equivalent of the German Nazis and the Japanese banzai troops that wreaked so much pain and destruction on the world more than 50 years ago. And the rest of us - well, we will have to manage as best we can. Our houses lie in tatters, no certainty in our jobs for tomorrow, our life savings gone - just like that. 

Yet it is an inevitable solution, fair or not. We just comfort ourselves by saying that the world recovered from its economic malaise once, and the world will recover from this financial malaise again. The only thing is - we must catch and punish the perpetrators of these fraudulent investments products, bring them to justice, as much as the Nazis and Japanese Class X criminals were tried and disposed of.

Tuesday, September 23, 2008


China has messed up big time this time around. In the euphoria of the Olympics, which it hosted twice in the space of two months (the Olympics and Paralympics), it was widely praised by the international community for putting on a great show - certainly the best the world has seen so far. The world Press were almost unanimous in praising China for a job well done. The Chinese are unreservedly proud of their country, as this success went a long way towards erasing the disappointments of the Chinese since 1908, during the last years of the Qing Dynasty, of hosting the games and also erasing the epithet of the "sick man of Asia".

Yet in a matter of days, this achievement now hangs under a cloud with the milk-tainting scandal. The problem was exacerbated by the fact that this was only revealed to the world only now when the problem was known as far back as March this year, with the whistle going off in early August. That the Chinese Government kept quiet till after the Olympics surely lays a charge of recklessness at the very doors of Tian An Men. The Chinese government is doing damage control now with the help of Minister Wen Jiaboa - or Wen yeye, as he is fondly referred to. But that is little use now. So far 4 precious infant lives have been lost - in China and Hongkong, with an incredible 53,000 others at risk in China alone, whose only fault is drinking the melamine-tainted infant milk. Worse, the problem may not be limited to China, but to any country that has been consuming milk and milk products originating in China.

Clearly this incident, and others before it (fake milk scandal of 2004) has demonstrated that the 5,000 year old civilisation has lost its sense of morals and ethics - totally. For the love of money, manufacturers have seen fit to introduce foreign elements (read 'poison') into perfectly good food so as to sell more of their products, thereby reaping more money. Harming people does not seem to have figured in any considerations of their actions. A month ago, I was a proud Chinese. Today, I am ashamed that I am a Chinese.

This time, as 100 years ago, the Chinese well deserves the epithet: The Sick Man of Asia in more ways than one. It is a shame that nothing has changed in 100 years. The only thing is this time around, it is the Chinese's own doing. Sadly, effort to shake off the world's bullying attitude towards China has come to nought.