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A Peculiar Form of Global Harmony

Does the current U.S. economic downturn make Americans appreciate the Asian crisis of 1998?

July 16, 2002

Does the current U.S. economic downturn make Americans appreciate the Asian crisis of 1998?

Truth be told, the earlier success of the Asian countries had left a sour taste in the mouths of many people in the United States. It was not just the fact that somebody seemed to "beat" the world's largest economy — although that certainly hurt.

More painful were the speeches of the leaders of these Asian countries. They rejected the idea that U.S.-style economics led to their countries' successes.

Instead, they posited the existence of "Asian values." These values, they claimed, were superior to the rough-and-tumble of U.S.-style competition. And that is why Asian countries had such enviable economic records.

This claim occasioned a hot debate — much hotter than the simple economics underlying the proposition would have suggested. The claims and counterclaims really originated from a kind of cultural competition.

Then came the Asian financial crisis — and talk of "Asian values" ceased quite quickly — except among U.S. commentators who gleefully claimed "I told you so."

After all, when the same leaders that had criticized the United States had to come, hat in hand, to the U.S.-led IMF for bailout money … well, it seemed only simple justice.

Thus, the problems of the Asian countries did not garner much sympathy in the United States. If anything, Americans were pleased that computers and other electronic gadgets became even cheaper, because local economies in the Far East had a hard time coping.

The dramatic tales in newspapers certainly made for some good stories. Some people, once in the solid middle class in Korea and Thailand, had a hard time making ends meet.

And there were dramatic stories of husbands who would still leave home every morning dressed in full office regalia — even though they had been fired from their job. They simply found it too embarrassing to tell the painful truth to their families.

Closer to home for Americans, there were features about families that could no longer afford to have their children study in the United States. "Too bad," was the reaction of many in the United States. But maybe it was too much of a luxury to have these kids come all the way to the United States in the first place, some Americans thought.

Now let’s fast-forward to mid-2002. Financial markets throughout the West are gripped by a tremendous crisis of confidence. Stock markets are in a severe decline. Republican strategists in the White House — feverishly planning the ins and outs of this fall’s mid-term elections — fervently hope that the current downturn won’t become known as the “Bush Freefall.”

They worry because the issue has an all too real connection to people’s pocketbooks. Many people in the United States are all of a sudden very concerned about their financial futures. Will I get to retire in time? In fact, with my nest egg melting away, will I ever be able to retire?

And one can imagine people from Thailand to Singapore, from Indonesia to Korea, looking at current news reports with some sense of indignation. Did these Westerners earnestly believe that it was just folks in Asia who were prone to overdoing it?

Was it only in Korea/Thailand/Indonesia that companies overexpanded/overbuilt/fudged their numbers — and prepared the ground for a financial meltdown?

As a matter of fact, many of the excesses that the Asians fell victim to were, in one way or another, induced by the West. By promises of "Just build it — and they will come."

Or by promises that the consumption profile of the average American was near-limitless. Or by high-flying theories about open capital markets advanced in Washington, D.C.

At the core, what we should learn from all this is: Any sense of cultural superiority is an exercise in futility. Nobody is above catching a virus, whether on the computer, the airplane — or the financial markets.

The world just is far too interrelated — and all of us are too human — to avoid making the mistakes that lead to these problems.

It may be sad — and indeed worrisome — that all of us around the world begin to understand the strength of global harmony first and foremost because of the downturn in financial markets. But — if nothing else —the mere sense that everything hangs together will prove to be valuable over the long term.