Strong governance

I am a supporter of Barack Obama because I believe stronger governance is needed in America at this stage.

Some years back, I was puzzled by how the United States – the richest country in the world – constantly registers budget deficits annually and borrows billions from China. During a discussion with friends, I posed this question and was informed that the American economy was driven by credit. This concept further confused me.
It is apparent now, however, that with the current credit crunch, credit-lovin’ America is witnessing a crisis.

Since the dawn of Ronald Reagan’s trickle-down economics, things have been fundamentally disarrayed. My history professor once said in class the financial crisis we’re seeing now is the result of that ex-President’s initiatives. My professor’s sentiments on deregulation are reflected in the documentary “Enron: The Smartest Guys In The Room,” in which Enron bosses Ken Lay and Jeff Skilling are portrayed as supporters of deregulation only to abuse the financial system for personal gain.

Corporate America has truly fallen too deeply in love with the free market, as evidenced by the current crisis. It seems the average American, too, has lost good habits of saving and spending within his or her means. When credit becomes too easily available to people, it breeds greed and complacency.

The emergence of the tiger economies in Asia (South Korea, Hong Kong, Taiwan and Singapore) – as a result of adopting capitalism – has meant citizens of these countries are becoming huge consumers and living increasingly lavish lifestyles. Their growth spurt started a tidal wave of consumerism that swept through Asia and energized China and India.

The youth in these countries have equated material wealth with happiness. To be rich, materially, is glorious.

Ask the average young Chinese, Singaporean or Indian and he’ll tell you that he wants to be the next Bill Gates. They are adapting and innovating in technology faster than the average American because they’re working longer hours and are embracing science and mathematics.

The difference, however, is that many Asians still hold the values of saving and spending within his or her means, passed on from parents who were typically less well-off. In the column “Who Will Tell the People?” Thomas Friedman writes that America’s decline occurred “because over the past three decades, the Asian values of our parents’ generation – work hard, study, save, invest, live within your means – have given way to subprime values: “You can have the American dream – a house – with no money down and no payments for two years.”

This idea of “Asian values” was reiterated in Alan Greenspan’s book “The Age of Turbulence,” wherein he argues that prudent saving and spending in these economies was a strong factor in their stunning growth.

When Enron and Worldcom collapsed in early 2000, the cracks of deregulation started to show.

With the fall of Bear Stearns, Fannie Mae, Freddie Mac, AIG and Lehmen Brothers, it is clear that deregulation has caused America to spiral into trouble.

As for solutions to the economy, the divide between Obama’s and McCain’s policies often treads on the ideological, and one cannot predict the outcomes of their policies.

For Obama, however, he proposes stronger governance, which is not to be mistaken as socialism. And I believe a stronger government action is the solution for America’s economy to recover now.