Today I Learn… I make a point of learning something new everyday. This is what I learn each day

1, Jan 29, 2009

Teach Our Children on Economic Discipline

Filed under: Economy,Education — admin @ 9:21 am

Why do I dwell so much on money and economics and won’t move on to something more cheerful than this? The recent sharp economic downturn comes at the time when my children are mature enough to understand and learn something. I want to nail this experience in their heads so that they could learn a lesson from this crisis.

At the recent annual World Economic Forum in Davos, the world politicians and business leaders used this opportunity to throw blames at each other. Not long ago, the newly-employed US Treasury Secretary blamed China for “currency manipulation” that led to high US trade deficits and contributed to the current economic crisis. I have never known China has become so powerful that she can create such a hell of luck for the US. How we wish the problem were this simple!

The Davos gathering provided Chinese leader a chance to have China’s voice heard. The Chinese Premier, in his first appearance at Davos, sent back the blame for the crisis squarely on the US authorities. The crisis was caused by US “inappropriate macro-economic policies of some economies and their unsustainable model of development,” a model of high spending, low savings, living on credit, without economic discipline, that is, “the failure of financial supervision and regulation”.

Russia Prime Minister, if anything, is more frank and challenging. He blamed American “poor quality regulation” and the world’s dependence on the dollar as the only reserve currency.

To be sure, financial supervision and regulation are beyond individual’s control. The only thing we can do is not following the failed spend-more-than-your-earning model. Go the other directions — spend-less-than-your-earnings. A strict financial discipline needs to be in place so that we can squirrel away enough acorns for extreme weathers and live as decently as our dearest neighbor — the squirrel family.

No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URL

Leave a comment

You must be logged in to post a comment.

Powered by WordPress