[Viewpoint]A middle-class taleA friend of mine complained: “Do you remember the lead article on page 1 of Friday’s paper? I don’t think it was about someone with whom all readers can relate,” the friend said.
The story was titled “Cruel October for Korea’s middle class.” The story featured an executive at an established company, who was suffering from triple hardships due to the global financial crisis that started in the United Sates. The article’s purpose was to use his story to look into the economic hardships of Korea’s middle class.
“How can you possibly borrow 300 million won ($242,100) to buy a house when you only have 270 million won at your disposal?” the friend asked. “How was it possible for him to send a daughter to study in the United States for more than a year when he only earns 72 million won per year?”
In fact, I was amazed by the story. After paying income tax and premiums for the national pension and state-run health insurance programs, lump sums go from the man’s monthly salary for utilities and maintenance fees. What’s left barely covers his living costs, but how was it possible for him to pay the interest on the bank loan and tuition for his daughter’s study abroad?
In good economic times, such a lifestyle is only possible by spending nothing but the bare necessities. And yet, the executive had spare money to invest in funds and lose about half of the seed money.
As my friend pointed out, the executive may not be the typical person to represent Korea’s middle class. And yet, I told my friend that the story still has symbolic meaning. The story is a composite of Korea’s middle class families. Some borrowed to buy houses and it will be fortunate if housing prices don’t fall below what the family paid, while others suffered losses after investing in retirement funds, believing that they would grow in the long term.
Some are probably suffering from ridiculously high private education spending, not to mention expensive tuition for children studying abroad.
And yet, the executive apparently carried all these burdens alone on his shoulders, and for a newspaper, it was an economic example about which to write a story.
Maybe the article could still have been convincing if the case was not so dramatic. It would have been a good article if it had talked about stories of three different people with three different burdens, because the story is still unique enough to make the headlines.
No matter what the reason is behind it, a country where middleclass families are suffering under such heavy burdens will never move forward smoothly.
Korea’s backbone is under pressure, and foreign media are having a field day exaggerating the nation’s crisis whenever it has an opportunity.
Some compare Korea with Iceland, whose population is smaller than that of Bundang. This hurts Korea’s reputation. Come to think of it, countries that were hit directly by the financial crisis after excessive growth share similar characteristics with our middle class families.
Iceland is a wealthy nation with more than $40,000 per capita GDP. The wealth, however, is not a result of vigorous fisheries. It was the result of money games, with foreign loans amounting to 10 times the GDP.
Once praised as the happiest people in the world with the self-proclaimed title of financial hub, the country enjoyed good days, but debt-based wealth is not sustainable. Iceland was legendary for its success, going from being the poorest nation in Europe to the richest.
After easing regulations, the country attracted large foreign investments and recorded an average 7 percent annual growth for 10 years since 1996. But eventually, bubbles in the financial industry popped.
The country has 4.3 million people, but 100,000 new houses were built last year alone. England has a population 12 times larger than Iceland, but it only built 180,000 houses last year. It is clear that Iceland had a housing glut.
Dubai, nicknamed the miracle in the desert, also suffers from rumors of national bankruptcy because of a wide range of infrastructure projects, which were once the country’s pride. Because it recklessly pushed the projects forward, the nation’s debt now amounts to 60 percent of the GDP. Amid the current situation, the financial crisis paralyzed the money flow.
The disasters were exposed because of the U.S. financial meltdown, but they were fostered within each country.
Whether it is a nation or an individual, only a healthy entity will survive while weaker ones will collapse.
The only thing that can be trusted is one’s own physical strength. A valuable lesson is learned: It is one’s personal responsibility to make wise decisions about how heavy a burden one can carry. Whether we fall or not, we have learned that it is our responsibility.
So, in John Donne’s immortal words, “Never send to know for whom the bell tolls. It tolls for thee.”
Paul Kennedy, a professor of history and the director of international security studies at Yale University, recently quoted Donne’s poem in a recent column. I think it fits our situation perfectly as well. “Never send to know for whom the bell tolls. It tolls for thee.”
*The writer is a deputy political news editor of the JoongAng Ilbo.
by Lee Hoon-beom
with the Korea JoongAng Daily
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