[Viewpoint]A hard road aheadI feel dizzy and confused. After the news broke about a $30 billion currency swap deal with the U.S. Federal Reserve, the dollar dropped more than 170 won in a day, hitting 1,250 won per dollar. Only a few days ago, the stock market fluctuated an unprecedented 160 points and trade was suspended under the “sidecar” rule in the morning and under the “circuit breaker” rule in the afternoon. The Kospi, however, marked its biggest daily gain ever on Thursday, marking an increase of 115 points, or 12 percent.
And yet, the stock markets of only a few days ago show that uncertainty has disappeared because the markets plummet after only a single piece of bad news. Despite the dollar’s plunge and skyrocketing stock prices Thursday, there is a long way to go for the won to reach the 1,000 per dollar mark. The stock market still needs to recover more than 30 percent to get back to where it was a month ago, and another 90 percent increase is needed to get back to its peak.
The U.S.-Korea currency swap is critical in ending uncertainty about Korea’s foreign currency reserves and currency speculation. However, it doesn’t necessarily resolve another problem - the loan crunch in the domestic financial market. Of course, the latest measures from financial authorities such as the Bank of Korea’s rate cut and buying up bank bonds will temporarily increase circulation, but it will still take time for the money market to operate properly.
The United States and other countries are engaged in a rate cut competition, proving that their situations are also difficult. Taking into account that the subprime mortgage crisis in the United States, which triggered the global financial turmoil, was prompted by unreasonably low credit standards, the current measures could be nothing more than stopgap measures. It is undeniable that as part of the global economy, Korea will also face tough times for a while.
When an economy goes into recession, individuals are hit the hardest. The issue is how we can fight through the period of pain and overcome it. The government can find some solutions such as increasing tax revenue and issuing government bonds.
Companies can cut salaries and lay off employees. However, individuals and households have to face the problems on their own.
Of course, some may say that they can be content living in poverty and take pleasure in being honest, but that is not a solution for everyone. Except for the top 5 percent of the population, who have enough money to maintain their lifestyles regardless of the economic situation, each household will have to find additional work or else tighten the purse strings.
Children on the cusp of adulthood must go out and find jobs. It is also time for parents paying too much for their children’s private education, including study trips abroad, to think about ending such a lifestyle.
Instead of being obsessed about a house that won’t sell or stocks and funds with plummeting values, it is time to think about how to restructure the way we spend our monthly incomes. Maintaining a lifestyle within the limits of each individual is not something to be cynical about. It is also not a concept from the feudal system that seeks to maintain the traditional social hierarchy. It is a philosophy for life.
Some may worry that life will become dull. In Japan, which suffered a severe economic recession known as the lost decade, people take the STRESS approach to relieving stress. The acronym stands for sports, travel, recreation, eating, sleeping and smiles. Some substitute “singing and speaking” for the last two words. Others use “study and service.”
When times are tough, we must find the meaning of our lives on our own. Some say it costs too much. However, sports does not necessarily mean playing golf or working out at a gym. Travel does not have to be a trip overseas.
Sports can be carrying badminton rackets or a soccer ball to a nearby field. Travel is about visiting scenic spots in one’s city. A gourmet tour does not mean visiting expensive restaurants. It can be eating homemade food cooked by a husband and his children.
We must never forget that we have to find a lifestyle that matches our situation. That is what we must do to prepare for the tough period that lies ahead.
*The writer is the chief of the editorial page of the JoongAng Ilbo.
by Park Tae-wook