It's late morning on October 3rd in Seoul. Most offices are closed today, and mass transit is on holiday schedule, due to the National Foundation Day.
With the US economy bailout being the front-page news item all over the world, including here in Seoul, I have to make a few choice comments - particularly from the Seoul perspective.
The South Korean economic establishment, and its propaganda outlets, will gladly point out that the US economic doldrums are the result of its inability to control excessive greed of the labor unions. That, in turn, will be an excuse for the establishment here to try to weaken, and eventually kill off, the South Korean organized labor, which has quite a bit of power despite having only two decades of legal history.
I know better. American labor unions have been much weaker than their European and even Canadian counterparts, and Americans work harder, often for less, than the workforces of other developed countries, maybe except for South Korea. The real culprit is the neoliberal stranglehold on American economics and politics since the election of Ronald Reagan in 1980. Reagan gave massive tax cuts for the wealthy, under the premise that this will increase spending by the wealthy and result in the wealth trickling down to the poor. That never really worked out; the rich kept all their wealth for themselves. The madness took a temporary pause under Clinton, but W resumed it with reckless abandon. Meanwhile, as China opened up, American manufacturing jobs moved there, causing mass trade deficits - and even less wealth being trickled down to ordinary Americans. Both trade deficits and government deficits soared, the latter due to the refusal to cut military spending while being more than willing to cut everything else.
Unfortunately, South Korea has decided to follow the very same neoliberal ideology that America has tried for the past three decades - and failed. The likes of Samsung would rather offshore than treat the workers fairly; as a result, South Korea is now running massive trade deficits, unheard of just a few years before, when its semiconductors, electronics, ships, and cars were (and still are) the envy of the world. The rich, now beneficiaries of massive tax cuts, do not spend their money on domestic economy either; they always insist on imported luxury goods, to a point where Lexus set sales records here in 2005, even as anti-Japanese sentiment was flaring up in the rest of South Korea over Japanese territorial disputes. And the Lee Myung-bak government would rather spend its money on US politics than on its own people, and the government budget is starting to look quite sick. Economic indicators are even worse under Lee than under his inept "socialist" predecessor Roh Moo-hyun, with massive unemployment among the young; even though the economy is still growing pretty well (at least by US standards), most South Koreans tell me that the economy has never been this bad since the Kim Young-sam government (New Korea Party, which is now again in power as the Grand National Party) bankrupted the economy back in 1997, requiring massive International Monetary Fund loans.
Most importantly, South Korea has always been very trade-dependent, and its recent drive for globalization and free trade agreements prove that. And that means any economic hiccups in the major export markets, like the US and Europe, will cause massive pains here. After all, the South Korean economy really needs the Americans to keep buying Samsung cell phones and Hyundai automobiles; when Americans can no longer afford those products (especially now that both Samsung and Hyundai have moved quite upmarket), it's big trouble.
This can mean only one thing. Lee needs to listen to his people, and start protecting the interests of everyone - not just the rich and the establishment, but the have-nots as well. And he needs to stop funding the Republicans in the US, who will continue the failed policies of the past three decades, destroy the US economy, and deprive South Korea of its most important export market. But I don't think he is capable of any of this.
On a lighter note, meditation and therapy are doing much better today than last time. Later today should see me resume my Seoul sightseeing.
