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Monday, Dec. 1, 2008

Look at the brighter side of the financial crisis


BEVERLY HILLS, Calif. — One good way to counter depression (of the emotional and of the otherwise kind) is to emphasize the positive (of the imagined or otherwise kind).

What I have been doing sometimes these days for therapy and equanimity is recalling the Asian financial crisis of some 10 years ago. Remember how the Clinton administration and the U.S. policy elite would publicly berate Asia (especially Japan and China) for all the things they were allegedly doing wrong? Remember how often we made the point to them that in economic affairs they ought to restructure, deregulate and be more like us?

Well, that was then — and this is now. Right now China and Japan have more of our dollars than they can count and, their troubles notwithstanding, do not quite seem to be in as bad shape as the United States.

Right now, in fact, no one is blaming Asia for the global financial turbulence but many people are coming down hard on us. The pervasive poison that was contained in our pernicious financial products looks to be causing even more global misery than China's food and consumer products, which is saying something.

And right now, the world stands amazed to watch our incumbent president huddling in the White House as if simply counting the days left until he can hop into his escape helicopter for the grateful ride to exile in Texas, even as financial markets continue to roil, churn and burn. And (to be nonpartisan about it) "The One" — what we Americans call President-elect Barack Obama — also huddles in his Chicago bunker as if in fear of the raging economic storm outside. Chicagoans are used to bunkering down in terrible weather — but this is ridiculous!

Not only is Asia not so much in the negative spotlight these days, but the region can be proud that over the last 10 years, the world has learned more helpful lessons from Asia than from the U.S. about how to handle one's economy. Those lessons include:

* Saving money is really not such a bad idea (many Asians are famous savers), especially when those rainy days come, American Express keeps crunching your credit ceiling and the mortgage bankers are howling at the door.

* Significant reform after a financial crisis will help cushion the pain of the next one. (Let's hope Congress and the Obama Administration will learn this lesson.)

* Strong leadership is better than wishy-washy leadership. Indeed, it is the view in Asia that the government can and does play a positive role in helping make an economy dynamic, innovative, and resilient. Until very recently in America, this perspective was viewed as quasi-socialist!

* A related lesson is that, for some really important, public-interest things — such as health care, public education and safety-nets like social security — national economic markets all by themselves do not produce the best public-interest value for the money. In fact, it is the widely shared view in parts of Asia that the value of all the individual goods in society does not always trump the value of the same amount of money invested in the overall public good and general well being.

* Worship public education and invest aggressively in it. Cutting it is to reduce the size of the promise of society's future (in California now, public education is starting to die due to thousands of cuts here and there).

* Asians may generally not realize it, but those of us who visit Asia (and not just the tourist trap spots, either) often notice this difference in treatment of the customer (though this is not yet widely the case in China): While it is true that in the U.S. the customer is king, in Asia the customer is God. Which leads me to a final study point for Americans:

* Make better cars! If they made them better, the head of the Big Three U.S. automakers (General Motors, Chrysler, Ford) wouldn't have brought their begging bowls to Congress recently in search of a lifeline from — guess what? — Big Government. Isn't that rich?

Conclusion: That which doesn't kill you — goes the old saying — makes you stronger. Assuming Americans manage to survive this horrific financial meltdown, we should emerge from it in better shape — especially if we observe the experience and lessons of Asia these past 10 years.

Tom Plate, a member of the Pacific Council on International Policy, is writing a book on Asia. © 2008 Pacific Perspectives Media Center.


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