Surviving Meltdown: Reflections on the Global Economy Part I
Over the last months the economic crisis has enlarged our vocabulary: ‘bailout,’ ‘stimulus package,’ and ‘meltdown.’ Everyone is thinking and talking about the economic situation. The G20 group of nations met in London in April 2009 and agreed to spend USD 1.1 (AUD 1.58) trillion dollars to get banks to loan to each other and create jobs. Something like USD 5.5 (AUD 7.7) trillion will be spent by the end of 2010 to rescue the world’s economy.
Any idea how much a trillion is? Technically speaking, it is a billion 1,000 times. A billion is a million 1,000 times. A million is a thousand 1000 times. To give you some perspective, go back to the year 731 BC, when there was a Kingdom of Judah and Israel. Spend $1 million dollars per day, every single day from then until now, and you would reach $1 trillion. The US economy, the largest in the world, had a GNP of $14.33 trillion; Japan is next with 4.8 trillion. China is $4.2 trillion.
With figures like these, no wonder we feel bemused and helpless.
The Bigger Picture
Like everything in life, it is important to be ‘holistic’ and to see the ‘bigger picture.’
First, let me stress that I am not an economist. I preach and teach the Bible. But I do have a special emphasis and that is on the subject of ‘world trends,’ which I have taught at Bachelor’s degree level since 1991. For years I had a monthly column on world trends in our denominational magazine. I also convened four TRENDS Conferences from 2000 to 2003. Learning world trends and Bible make sense: if we are to fulfill Christ’s Great Commission to ‘go and teach all nations’ (Matthew 28:19 KJV), we need to have a message (the Bible) and a knowledge of where we are going (the world). Like the ‘sons of Issachar,’ we need to have understanding of the times to know what we ought to do (I Chronicles 12:32).
The Economy in Perspective
First, let’s be clear: the global economy is in trouble. What is so breathtaking are things like:
How a few individuals, whether out of greed or incompetence or both, could help pull down their respective bank, insurance company, or automobile company, and the entire economy with it;
How interconnected the world is economically. When Wall Street sneezes, Beijing catches a cold and Asia fights off pneumonia.
How issues of human character are central—yet largely overlooked—when it comes to the fashioning of the economy;
The People’s Republic of China, founded by Mao Zedong in 1949, is purchasing US bonds to the tune of $40 billion a month (who would have ever imagined that the so-called communist giant would be bailing out the capitalist giant?).
Like the rest of us, our political leaders may (or may not) be clueless of what to do but they have to ‘be seen’ to be doing something, sometimes ‘anything’; the London G20 Summit gave such an opportunity. This particularly summit my also signal the threshold of a new economic order in the light of the US’s ailing economy.
Massive Economic Transformation
A point about the economy that is largely overlooked is that we are going through the most significant change since the industrial revolution in the 18th Century. Starting in England, the industrial revolution caused massive dislocation, uprooted men from their families, emptied out farms and villages, and inflicted much pressure and pain. This revolution changed the economy and the face of the world changed with it. Yet who wants to return to the days of horse-drawn carriages instead of cars, candles rather than light bulbs, abacus instead of a calculator, and the pen and quill to the typewriter (remember one of those) to the personal computer and laptop.
Yes, the world changed forever during the industrial revolution, mostly for the better. But the price was very high. It also gave us a particular mindset, one that does not easily change even when the economy does.
For the last two decades and more, we are going through the transformation mill again—the biggest in 200 plus years. We are leaving the industrial age behind and entering into the information and communication age. Raw materials and manufactured goods will still be sought after commodities; however, they will no longer be the only ones or even the prime ones. Information is now the new currency. People want their information fast, fun, and at the finger tips. The information age, dare we call it ‘information explosion’ has hit us like an avalanche. Knowledge is doubling every three years instead of every thousand. One observer noted we are becoming ‘data-drunk.’ A new brand of entrepreneur is emerging: they are called ‘info-preneurs’ and they make their living through information instead of goods and services.
As mentioned, mindset can still remain in the ‘industrial age’ even though the ‘information age’ has truly come. Industrial age thinking includes:
1. EDUCATION: the common motto was ‘To get a good job, get a good education.’
2. WORK: Spend your working life at a major company, which will give you a golden handshake and great retirement entitlements.
3. GOVERNMENT: if you want job security, work for the government.
My own mother was a perfect example of an industrial age working professional. She applied for a job at only one place, which hired her on the spot. She rose to management level within 6 months and remained there for the rest of her 37 years of working life. When she retired, she was given a healthy pension, free medical coverage, telephone, and one year’s salary as a bonus. She enjoyed these benefits for another 25 years until her death in October 2008. Those were the ‘good ‘ole days.’
Today’s changing economy does not permit life-long employment at a major company, which can downsize their workforce at a moment’s notice. Even long-term employees are given the pink slip with little warning. Even jobs in a ‘secure’ government position are not immune. Let’s face it: with governments spending billions on bailouts and stimulus packages, they are going to have to trim budgets somewhere. Bureaucrats beware!
The transition from industrial to information age is not the cause of the global meltdown. But it is possible that some lay-offs or retrenchments will be more a product of the former than the latter. In any case, the way forward will require a new way of thinking.
For those who wonder if there is any safe haven in the midst of this economic turmoil. The answer is ‘yes.’ Both come from the most famous sermon in the world, known as the ‘Sermon on the Mount.’ The first is for daily provision:
‘But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you’—Matthew 6:33 KJV
The ‘these things’ Christ refers to are the daily needs like food, drink, and clothing. These necessities are important to everyone, both sinner and saint. The world makes their pursuit a major, if not excessive, priority. The promise is that if you will seek God’s kingdom and righteousness first, the very things that the world exhausts itself in pursuing will be given to you by God as a bonus.
The second promise is for those who seek security.
‘Therefore whosoever heareth these sayings of mine, and doeth them, I will liken him unto a wise man, which built his house upon a rock: and the rain descended, and the floods came, and the winds blew, and beat upon that house; and it fell not: for it was founded upon a rock’—Matthew 7:24-25
As people of faith can attest, the safest place to be on this planet is in the will of God according to His Word. Even with all the economic winds and rains, the rock will continue to stand.
Watch this blog for more installments on ‘Reflections of the Global Economy.’