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Bruce Cumings Comments on Japan

May 18th, 2007 . by Gerry-Bevers

The following is part of an Ohmynews interview with Bruce Cumings, a history professor at the Universtiy of Chicago who is probably best known for his book, “Origins of the Korean War.”

As a historian, what is you view on the continuing historical disputes in the region. Has Japan done enough to atone for its past aggression?

I think Japan is going in the other direction. I think Japan had better policies and attitudes 10 years ago than they do today. Twelve years ago, Socialist Prime Minister Murayama made a profound apology for Japan’s transgressions during and before World War II. Today things are going in a very bad direction, I think.

For a long time — I have to admit decades — I discounted alarmist stories of Japan moving to the right and wanting to revise the constitution. Generally those forces weren’t important 10 or 20 years ago, but they’re very important now. They’ve been moving closer to the Bush administration, particularly Rumsfeld when he in office, and Cheney and what they want Japan to do.

I think Japan is playing a dangerous game. I worry about it and I think everyone should worry about it. Japan is a democratic country and I don’t think the right-wing can get enough power to revise the constitution. But fact that they’re trying it is worrisome enough.

Prime Minister Abe came into power wanting to repair relations with Korea and China. And almost the first thing he said was to deny the government’s responsibility for the comfort women. That was a very reprehensible statement. I’ll just end by saying that I think the Japanese leadership is getting worse instead of better in owning up to its crimes in World War II.

Link to the English Interview

Is it just me or does that answer seem extremely lame and unscholarly? In fact, I think the reporter could have gotten a better answer from a passerby on the street. Let’s’ take a closer look at what the professor said:

I think Japan is going in the other direction. I think Japan had better policies and attitudes 10 years ago than they do today. Twelve years ago, Socialist Prime Minister Murayama made a profound apology for Japan’s transgressions during and before World War II. Today things are going in a very bad direction, I think.

Did the professor say anything of substance in that paragraph, except maybe the background information in red? It looked like he might be getting ready to say something scholarly when he told us what Prime Minister Murayama did twelve years ago, but then he followed it with the lame statement, “Today things are going in a very bad direction, I think.” Why didn’t he explain why the direction is “very bad”?

For a long time — I have to admit decades — I discounted alarmist stories of Japan moving to the right and wanting to revise the constitution. Generally those forces weren’t important 10 or 20 years ago, but they’re very important now. They’ve been moving closer to the Bush administration, particularly Rumsfeld when he in office, and Cheney and what they want Japan to do.

Notice that he tries to blame Japan’s movement to the right on Bush and Rumsfeld and doesn’t say anthing about North Korea’s firing a long-range missle over Japan or her exploding a nuclear bomb. He also did not mention anything about all the saber rattling that has been coming out of South Korea and China over history books and territory.

I think Japan is playing a dangerous game. I worry about it and I think everyone should worry about it. Japan is a democratic country and I don’t think the right-wing can get enough power to revise the constitution. But fact that they’re trying it is worrisome enough.

So it is Japan that is “playing a dangerous game” and is “worrisome,” not North Korea? Notice again that he is not explaining anything, just making vague prophecies of some unexplained coming diaster. He sounds more like a two-bit fortuneteller than a history professor.

Prime Minister Abe came into power wanting to repair relations with Korea and China. And almost the first thing he said was to deny the government’s responsibility for the comfort women. That was a very reprehensible statement. I’ll just end by saying that I think the Japanese leadership is getting worse instead of better in owning up to its crimes in World War II.

Did Prime Minister Abe deny responsibility for the comfort women? No, he didn’t. He only denied that the Japanese government kidnapped the women. The thing that is reprehensible is Professor Cumings’ misrepresentation of Prime Minister Abe’s statement. And, of course, the interview ends with another unexplained, lame statement of what Professor Cumings “thinks.”

I would like to congratulate Professor Cumings for finally making my little-known “Goofball List.”


48 Responses to “Bruce Cumings Comments on Japan”

  1. comment number 1 by: toru

    I thought exactly the same thing. You are awesome. 🙂

    He is like “North Nukes are good nukes” “it’s It’s not a missile, a satellite

  2. comment number 2 by: Matt

    I started reading “Another Country” at a friends place, and it seemed to blame the US for starting the Korean War, although I did not read the entire thing. Anyway, I would classify him as an “advocate” even “advocate scholar”.

  3. comment number 3 by: jion999

    In the above article, this idiot says as follows:

    “I do hope for continuity from Kim Dae-jung to Roh Moo-hyun that their successor will continue their general reconciliation policies with the North.”

    He is quoted as writing in his book as follows:

    “Rejecting the verdict of Western historians who support Japan’s “modernizing role” in Korea, he characterizes the Japanese occupation (1910-1945) as a callous colonization that fostered underdevelopment, crushed dissent and suppressed indigenous culture.”

    I understand well he is a good friend (brown-noser?) of Korean leftists.


  4. […] Bruce Cumings, the distinguished Korea historian at University of Chicago, had some pretty harsh and not particularly well defended criticism of Japan in a recent OhMyNews interview. I can’t get it to load right now, but from what Occidentalism posted, it seems like he’s lost his temper with the Japanese nationalists. For a long time — I have to admit decades — I discounted alarmist stories of Japan moving to the right and wanting to revise the constitution. Generally those forces weren’t important 10 or 20 years ago, but they’re very important now. They’ve been moving closer to the Bush administration, particularly Rumsfeld when he in office, and Cheney and what they want Japan to do. […]

  5. comment number 5 by: gwbstr

    sorry that link should be http://gwbstr.com/b/2007/05/18/cumings-japan-alarmism-and-article-9-in-us-japan-ties/

  6. comment number 6 by: Brian

    I understand why Japan wants to change its politcal position in Asia, but I don’t think this is the right way. Somehow, the powers of Asia need to communicate with each other about co-operation instead of the instense “me vs you” politcal play being done now. If Japan keeps going in this direction, they will miss incrediable oppertunities to make ties with their fellow brethren. Asia is the future and Japan wanting to seperate itself from it is, IMO, not a wise decision. As much as Japanese hate to admit it, Japan is part of Asia.

  7. comment number 7 by: jion999

    Brian

    “Asia is the future and Japan wanting to seperate itself from it is, IMO, not a wise decision.”

    Asia doesn’t mean Korea.
    Japan will not separate from Asia but stay away from Korea.

  8. comment number 8 by: kjeff

    Matt,

    Did the professor say anything of substance in that paragraph, except maybe the background information in red? It looked like he might be getting ready to say something scholarly when he told us what Prime Minister Murayama did twelve years ago, but then he followed it with the lame statement, “Today things are going in a very bad direction, I think.” Why didn’t he explain why the direction is “very bad”?

    To be fair, it was one question(in over a dozen question interview) with no follow-up.

    So it is Japan that is ”playing a dangerous game” and is “worrisome,” not North Korea? Notice again that he is not explaining anything, just making vague prophecies of some unexplained coming diaster. He sounds more like a two-bit fortuneteller than a history professor.

    An F student acting up is just another day at school, and an A student does that, there’s a cause for concern, no? Japan doesn’t want be judged by N.K.’s standard, does it?

    Did Prime Minister Abe deny responsibility for the comfort women? No, he didn’t. He only denied that the Japanese government kidnapped the women. The thing that is reprehensible is Professor Cumings’ misrepresentation of Prime Minister Abe’s statement. And, of course, the interview ends with another unexplained, lame statement of what Professor Cumings “thinks.”

    The whole thing about P.M. Abe and the comfort women issue reminds me of Senator Clinton and the criticsm of her vote on the war. Her response was never ‘incorrect’; it was never ‘wrong’, but it’s never been clear either, if not intentionally unclear,’lawyer talk’ if you will. I think that’s pretty much what most people get when they hear P.M. Abe’s clarification on the comfort women issue.

  9. comment number 9 by: ponta

    Some people want others to say what they want to hear.
    Some people want to say what others want to hear.
    I think that is what’s happening here.

  10. comment number 10 by: General Tiger

    Gerry:

    I would like to congratulate Professor Cumings for finally making my little-known ”Goofball List.”

    That took you a long time. He was on my list years ago.

  11. comment number 11 by: kjeff

    Matt,
    Sorry, it was for Gerry.

  12. comment number 12 by: Brian

    Sorry to disappoint you Jion, but Korea is an unseperable part of Asia. If Japan wants to seperate from Korea than it will be leaving Asia.

  13. comment number 13 by: T_K

    kjeff,

    I still see no signs of the A student acting up. Having a military and encouraging normal patriotism hardly makes their policy analogous to Juche. Hell, by those standards, nearly every first-world nation, including mine, is “moving closer to the Bush administration” (to borrow Graham Webster).

  14. comment number 14 by: T_K

    Brian,
    No apology, no reparation, no sign of goodwill is enough for the Sunshiners. Other than catering to every whim of publicity-starved nationalist Korean politicians, there’s nothing Abe can do to ease the current situation.

  15. comment number 15 by: jion999

    Brian
    “Korea is an unseperable (inseparable?) part of Asia.”
    Geographically, yes.
    But, politically, not exactly.
    No Asian people recognize Korea as the pride of Asia.
    It is enough for Japan to have a good relationship with other Asian countries except N & S Korea.

  16. comment number 16 by: Ken

    Gerry,
    Next NSC staff in charge of Japan and Korea said not understanding Korean mood stirred up anti-US sentiment, didn’t she?
    http://www.chosunonline.com/article/20070518000032
    I feel uneasy about her.

  17. comment number 17 by: Gerry-Bevers

    I have already posted about that over at The Marmot’s Hole here. Here is what I wrote:
    ———————-

    That stupid “gibun” argument is so out-of-date. I can almost picture word-for-word what Korean policymakers are saying in a negotiation planning session:

    Korean 1: How will we ever convince the US to accept our demands?

    Korean 2: Hey, let’s use the “hurt-gibun” strategy.

    Korean 1: Are you sure they will still fall for that one?

    Korean 2: Are you kidding. They always fall for it.

    Korean 1: You’re right. Let’s do it.

  18. comment number 18 by: Ken

    Gerry,
    Thanks for letting me know another site.
    One person in it said her understanding was superficial but I think her brain was washed during her staying in Korea.

  19. comment number 19 by: ponta

    May I ask what “gibun” is? Is that 気分?

  20. comment number 20 by: Brian

    I’m sure you’ll find Korea political situation as inseperable as the geographical. Korea has way to many connections and resources within Asia for an antigonist like Japan to have any influence. It is Japan that is already way more isolated than the Korean pennisula in Asia. With current events, I do not foresee that situation changing.

    No one said anything about Korea being the “hero of Asia” so that would only be your biased selective perception talking. You guys do to much to underestimate the Koreans. They are no push-overs which is proven by your own hatred for them.

  21. comment number 21 by: 輝夜姬

    Ponta>

    From the context, I think so.
    “gibun” is 気分.

    気分 is pronounced as qifen(Chinese),gibun(Koresn), gib(Japanese)
    as 先生 is so xiansheng, sensaeng, sense.
    or as bandit is bandido(Portuguese, Spanish), bandito(Italian)

  22. comment number 22 by: Sweet Water

    Prime Minister Murayama’s period is by far the lowest point of the post-WWII Japanese history with respect to economy, policy, and social security. Mr. Murayama didn’t do anything good to recover Japanese economy; his policy on national security and Self Defense Force has no integrity; and his handlings of the Aum supreme cult’s terrorist attack and the great Hanshin earthquake were so poor that the Japan Socialist Party was forced to be resolved soon after his resignation, which I think is Murayama’s only contribution. It is understandable, based on their strong animosity toward Japan, that the worst cabinet of Japan is considered as the best one from the Korean point of view. What I am curious about is how the professor at U. of Chicago obtained the same mentality as that of Korean. Is his wife Korean?

  23. comment number 23 by: Newshound

    輝夜姬 said:

    Ponta>

    From the context, I think so.
    “gibun” is 気分.

    気分 is pronounced as qifen(Chinese),gibun(Koresn), gib(Japanese)
    as 先生 is so xiansheng, sensaeng, sense.
    or as bandit is bandido(Portuguese, Spanish), bandito(Italian)

    What was the point of that? I think pretty much everyone fully understands the relationships among the language groups.

    (Japanese: 気分 is not “gib”, it’s “kibun”, and 先生 is not “sense” it’s “sensei”)

  24. comment number 24 by: Ken

    It is South Korea that is spreading the distance between her and Japan, the USA.
    South Korea does not have core competance in economics.
    South Korea is heading for Shanghai Coop Org that is nowadays Warsow Treaty Org.
    South Korea is not dealt with as allied nation in new COCOM.
    So she cannot procure cutting edge tech so she has to develop it by herself.
    South Korea is not the strategic point to defence democratic league.
    Moreover, the US army’s family is jeopardized in case of N Korea’s intrusion.
    So the US army is drilling the refuge to Japan.
    It is only South Korea and the brainwashed persons that are not aware that she is crossing over Rubicon river.

  25. comment number 25 by: ponta

    輝夜姬

    Ponta>

    From the context, I think so.
    “gibun” is 気分.

    Thanks. Hmmm, interesting, but if so, gibun should not be a policy in any way..

  26. comment number 26 by: Brian

    Ken, I’ve never seen someone so blind. I’ve never seen someone talk themself so far from the truth. I feel sorry for your ignorance and mental illness. lol

    Anyone agree with anything Ken said? Any evidence? You give me a good laugh buddy.

  27. comment number 27 by: Ken

    Brian,
    I have never seen someone heap such discriminatory words as BLIND, IGNORANCE, MENTAL ILLNESS upon specific person.
    Matt,
    Are these sorts of persons permitted to post here?

  28. comment number 28 by: dogbert

    An F student acting up is just another day at school, and an A student does that, there’s a cause for concern, no?

    The thing is, there are many South Koreans who do not see North Korea as an F student. That’s the problem.

  29. comment number 29 by: General Tiger

    jion999:

    No Asian people recognize Korea as the pride of Asia.

    *Laughs* And what’s your idea of the “Asian People” ?
    Ken:

    South Korea does not have core competance in economics.

    Oh really? Where have you been in the last 50 years?

    So she cannot procure cutting edge tech so she has to develop it by herself.

    Have you ever thought of securing technology as securing industrial independence? My, your sight is surely far-sighted.

  30. comment number 30 by: Ken

    General Tiger,
    “Oh really? Where have you been in the last 50 years?”
    Do you understand economics?
    I will show you a few data from my library.
    Numbers of ‘Sandwich crisis theories’ are reported around there.
    http://japanese.joins.com/article/article.php?aid=86757&servcode=100&sectcode=110
    http://japanese.joins.com/article/article.php?aid=85927&servcode=300&sectcode=300
    “Have you ever thought of securing technology as securing industrial independence?”
    Then do you say Korea grew to current level by yourselves and is securing cutting edge techs intentionally?
    My, your sight is surely near-sighted.
    Where have you been in the last 50 years?
    http://japanese.joins.com/article/article.php?aid=86866&servcode=300§code=300
    Are you the one of the generation of brainwash education?
    Can you read Chinese characters?

  31. comment number 31 by: usinkorea

    Cumings should be best known as an asshole Pyongyang apologist with his head firmly shoved up his bum.

    Matt, you should finish North Korea Another Country and anybody else should as well.

    It shows the full perverted nature of this “scholar”‘s mind-set.

  32. comment number 32 by: kteen

    Some people should go back to kindergarten and learn the difference between ‘North’ and ‘South’ instead of calling a professor at the University of Chicago an idiot.

  33. comment number 33 by: kjeff

    Ken,

    I will show you a few data from my library. Numbers of ‘Sandwich crisis theories’ are reported around there.

    May I suggest a better library… To be fair, I don’t completely understand both articles; I don’t read Japanese, although thanks to Babel Fish, I was able to get the general gist of the articles, especially the later one since it was somewhat based on the FT’s editorial. Yes, Korea is sandwiched, but it’s really more like a big mac, plenty of of room to maneuver, lots of meat in there if you will… And, I think Korean government/companies are aware of it, and are working on necessary steps, the U.S. FTA, and the recent E.U. FTA talk among them. Does Korean economy have some problem? Sure, although the FT editorial missed the points almost entirely.

    Its growth depends heavily on exports, concentrated in a relatively narrow range of manufacturing industries.

    Duh… Not all of us are lucky enough to have 100 millions plus strong domestic economy. Yeah, we can criticize chaebol all we want, but conglomerate does transfer resources more efficiently in a ‘small’ domestic market. Ironically, I think Korea’s biggest problem is that she’s not learning English enough, smart enough that is, to compete with the likes of Singapore or Hong Kong to be competitive in financial service, health-care service, and tourism. Almost forgot, and those damn kang-pe unions are giant pain-in-the-ass, but that’s going off-topic.
    Going back to your original comment,

    South Korea does not have core competance in economics.

    If you mean a permanent core competence, sure. Korea has no natural resources, but unless you’re living on the top of oil field, your core competence is always going to be challenged/threatened by new-comers. And that’s what happened in Korea.
    P.S. Come to think of it, aside from diversifying, the only way to go is up, no? Now, who’s got the problem then? Have you seen the new Hyundai Azera?

  34. comment number 34 by: Brian

    Ken, do not get so offended. It is not me who insults you. Instead, your actions are doing all the talking. I have yet to hear any unbiased or non-hateful comment from you. I have yet to receive any genuine evidence for your ridiculous claims. Everyone else but you and Garlic-face have demonstrated some sort of common sense and integrity. Stop your foolish words and I will cease calling you out on them. There is nothing wrong with critisizing Korea, but the slander and generalizations you spew are not worthy of such a discription.

  35. comment number 35 by: Ken

    Someone heap such discriminatory words as BLIND, IGNORANCE, MENTAL ILLNESS upon specific person have no right to critisize others.
    Though I wonder why those gus are still permitted to post here.

  36. comment number 36 by: Ken

    kjeff,
    I decided to neglect you who had said such a retarded words but you are the 1st Korean who comment on the economy so I am replying to you.
    “May I suggest a better library… To be fair,” ?
    I am quoting Korean media which you guys only trust.
    Why don’t you use translation software such as;
    http://bbs.enjoykorea.jp/translation/translation_main.html
    Korea has better one because she calls herself as IT leading nation?
    “Does Korean economy have some problem?”
    Economy consists of various factors so it is hard to say in a word.
    Korea declared default in 1997 and every index is worse now.
    Above quoted articles are nicely got up.
    If I dare to pick one from tens of items Korea was pointed out by IMF to improve, it is direct finance market.
    Korea cannot help inducing hedge funds.
    They bring eufolia at the aspect of inbound and destructive impact at that of outbound.
    In order to avoid such impact, Korea ought to have transparentized finance market.
    Now is the aspect of outbound and all actions the gov’t is taking are against people’s happiness.
    “I think Korean government/companies are aware of it,” ?
    Now one of above articles is warning it as unusual fearing pressure from gov’t.
    “the U.S. FTA, and the recent E.U. FTA”
    Korea should have measured merits, demerits and total cold-heartedly before entering in FTA.
    “Not all of us are lucky enough to have 100 millions plus strong domestic economy.”
    Conglomerate favoured actions such as exchange control are collapsing people’s economy.
    “to compete with the likes of Singapore or Hong Kong to be competitive in financial service,”
    Hong Kong has large demand market at the back.
    Singapore has longer history and Chinese connection too.
    Korea’s finance market is more transperant than them? No.
    Its legal system for the case of conflict is more consolidated than them? No.
    “health-care service, and tourism.”
    Korean character is tender and patient enough to be nurse, helper, etc?
    Is there the atraction to visit for repeater?
    These are the discussions in eufolia thuogh they cannot be major industry, anyway.
    “hose damn kang-pe unions are giant pain-in-the-ass,”
    This is the very reason that Korea lost competance.
    “If you mean a permanent core competence, that’s what happened in Korea.”
    Not exact. This is explained in one of above articles.
    In short, not to waste time and money on such useless thing as anti-Japan behavior though she might get too late.

  37. comment number 37 by: kjeff

    ken,
    I can’t reply to your arguments because frankly, I didn’t understand a lot of it. I will say this though…

    In short, not to waste time and money on such useless thing as anti-Japan behavior though she might get too late.

    The time and money wasted are miniscule. The issues are not that significant, economically.
    As for the ‘sandwich’, I’m guessing that South Korea has a bit of time. America’s fears of China is real, and her trade policy has shown as much; FTA for S.K., and tariffs for China. That’s under a Republican president; protectionism is generally a Democrat’s plaything. And it looks like we’re getting a Democrat for president for the next four years…

  38. comment number 38 by: Ken

    kjeff,
    “I didn’t understand a lot of it.”
    That is regrettable! But nice try.
    It cannot be helped because even the journalist in charge of economy cannot understand in Korea.
    You are at least more manly than General Tiger who run away after having spoken in knowing manner.
    “The time and money wasted are miniscule. The issues are not that significant, economically.”
    That is right but which do you think exceeds in future, 4 nations which are consentrating most of energy on productive purpose or a nation which is spending US$4000,000 on non-productive biz such as;
    http://japan.donga.com/srv/service.php3?bicode=080000&biid=2006121182038
    “As for the ’sandwich’, I’m guessing that South Korea has a bit of time.”
    Oh! Yah? Without knowing the cause of bancrupcy of last time? How positive you are!

  39. comment number 39 by: Brian

    LOL. Ken, what did you just write?

    “Korea should have measured merits, demerits and total cold-heartedly before entering in FTA.”
    Total cold-heartedly? I don’t get it. lol

    Korean character is tender and patient enough to be nurse, helper, etc?
    wtf? … Horrible non-sensicle attempt at a biased generalization is what I see.

    Ken, please be quiet forever. Your desperation to find irrelevant, irrational, or uninsightful faults in Korea is a diservice to not only yourself, but also this site. Although everyone is entitled to their opinion, everyone here already KNOWS what your opinion is going to be.

    Every economy has its contingencies and problems. I don’t see what your critisizing about right now. Are you trying to over-look Korea’s immense successes for the past 50 years? Of course there are alot of positives and negatives in any economy. Simply listing some out does not prove anything. And I assure you that the Korean government is well aware of them and is doing its best to promote prosperity.

  40. comment number 40 by: Ken

    How can such a guy who hurl such discriminative words as BLIND, IGNORANCE, MENTAL ILLNESS on specific person post before any apology?
    Unbelievable!
    Having been pointed out own discrimatory speech, next is to suppress opponent’s speech?
    True character seems revealed.

  41. comment number 41 by: Brian

    Apology? Stop man, I can’t laugh anymore in one day. If truth requires an apology, than the truth sure does hurt. lol

  42. comment number 42 by: Ken

    Hurling such discriminative words on specific person is allowed in your country if it is true?
    Oh! That is why such a Mayor who uses ‘nigger’ in public place is elected.
    I am deeply convinced.

  43. comment number 43 by: kjeff

    Ken,

    That is regrettable! But nice try.
    It cannot be helped because even the journalist in charge of economy cannot understand in Korea.

    I couldn’t undertand your arguments because it’s hard to read what you’re trying to say. On several occasions, I felt that you lack basic understanding of economic concept.

    Oh! Yah? Without knowing the cause of bancrupcy of last time? How positive you are!

    First, it’s not bankruptcy; it was a financial crisis. Some economists do not believe that it’s a ‘real’ economic crisis because of the speed of how it spread, which is similar to a ‘bank run’.(Having lived in Indonesia, I had a chance to actually see it ‘live’. People lining up in ATM, and eventually burning the bank) Second, I don’t think even economists agree, and know for certain, on what actually caused the crisis. The crisis however exposed vulnerability of currency-pegged export-oriented and high-interest-driven ‘hot’ economy. And, both have largely and significantly been reformed. Third, it affected almost every country in Asia, except China and Japan. China because the FDI largely took form in ‘tangible’ asset, and Japan, had it not been in an economic limbo for a decade, it would have been similarly affected.

  44. comment number 44 by: Ken

    kjeff,
    “On several occasions, I felt that you lack basic understanding of economic concept.”
    Oh, Yah? Though, I would like to return the words to you.
    “it’s not bankruptcy,”
    That is correct. Good for you.
    I used bancruptcy as I thought you could not understand the wording ‘crisis’.
    “it was a financial crisis.”
    That is close but not correct.
    The last time was double crisis of currency and finantial.
    “The crisis however exposed vulnerability of currency-pegged export-oriented and high-interest-driven ‘hot’ economy.”
    You studied economics in school well, didn’t you?
    But the last time is defined by experts of ADB, etc as not such conventional one but as new type, which was triggered with rapid inflow of stock by hedge funds.
    They atributed the reason why China was not involved to stock movement was restricted (seems still now) and Japan to the scale, fewer stock movement by the market matureness, etc.
    Your theory cannot explain why Taiwan, similar scale and development level with Korea, was not involved in the crisis.
    If you do not trust me, try some reports by ADB.

  45. comment number 45 by: kjeff

    ken,

    That is close but not correct.
    The last time was double crisis of currency and finantial.

    Currency crisis is usually considered as type of a financial crisis, so…

    Your theory cannot explain why Taiwan, similar scale and development level with Korea, was not involved in the crisis.

    Taiwan was also affected to a lesser degree. I think(I’m not sure, and too lazy to double-check) that her currency was significantly devalued and there was double digit drop in her stock market. Having said that, yes, she didn’t get it ‘bad’ like South Korea, and there were several reasons for that. Among others, Taiwan maintained a decent current account surplus, and she had a sufficient foreign reserve to defend herself from currency drop. And her economy, unlike most in the East Asia, was dominated by small and medium size businesses…and the crisis was generally seen as caused by big business borrowing big money(and can’t pay it back).

    You studied economics in school well, didn’t you?

    Sadly, no…

  46. comment number 46 by: Ken

    “Currency crisis is usually considered as type of a financial crisis, so…”
    OK but you had better not answer such at the exam of college though both are usually accompanied each other.
    “Taiwan was also affected to a lesser degree. I think(I’m not sure, and too lazy to double-check) that her currency was significantly devalued and there was double digit drop in her stock market.”
    That is right but far from ‘crisis’ and other region’s countries were naturally influenced alike just as last February’s Shanghai shock.
    “Among others, Taiwan maintained a decent current account surplus, and she had a sufficient foreign reserve to defend herself from currency drop.”
    Korea had a sufficient foreign reserve as well but lost rapidly right before the crisis.
    “And her economy, unlike most in the East Asia, was dominated by small and medium size businesses…and the crisis was generally seen as caused by big business borrowing big money(and can’t pay it back).”
    Small and medium size biz sector in Korea was surely weaker than those in Taiwan and still shrinking now.
    And yet large size biz such as Acer, etc was also steady in Taiwan.
    If we relate to industry structure, Taiwan is perpendicularly integrated especially in PC industry and it is the competence of Taiwan with monopolizing 90% of PC manufacturing of world.
    Again, the point is whether rapid and large outflow of stock happened or not.
    Borrowing foreign money was only choice for Korea to invest because Korean deposits and savings are not enough unlike Japan and Korean finance market is not transparent so that foreign funds do not invest directly.
    Korean Banks, which borrowed foreign money at short term, lend to Korean biz at long term.
    The deficit of term causes financial crisis and the financial crisis brings about currency crisis.
    Devaluation of currency blows up foreign currency borrowings conversely.
    In order to reduce this risk (throw the risk on foreign funds), Korea must transparentize the finance market.
    Here, I have a few questions though I should have asked before sleep.
    I atribute the curse of the non-transparency to the unique investment structure called ‘Circling Investment’, which is prohibited in global std commercial code.
    The name is my direct translation as it exists Only IN Korea.
    Q1: How it is legalized in Korean commercial code?
    There is national-loan-like bond in Korea called ‘Currency Stabilize Bond’ issued from central bank and excluded from primary balance.
    The name is also my direct translation because no other country’s central bank issues such bonds.
    Q2: The warrant, the buyers and the excluding reason?
    “Sadly, no…”
    No. I correct my previous words to, “I felt that you HAVE basic understanding of economic concept BUT NOT UP-TO-DATE”.

  47. comment number 47 by: kjeff

    ken,

    No. I correct my previous words to, “I felt that you HAVE basic understanding of economic concept BUT NOT UP-TO-DATE”.

    I agree with you on that. I haven’t picked up any economic books/journals for a long long time, since college actually, which was…well, years ago.

    That is right but far from ‘crisis’ and other region’s countries were naturally influenced alike just as last February’s Shanghai shock.

    Crisis, or not a crisis? That’s the question, ain’t it? Perhaps you know more, but even the mighty Taiwan fell into recession of some sort a couple of years after that. Maybe I heard something wrong…

    Korea had a sufficient foreign reserve as well but lost rapidly right before the crisis.

    Not enough apparently, and I’m pretty sure it was relatively less than Taiwan. She was, and still is, a ‘lender’, no?

    And yet large size biz such as Acer, etc was also steady in Taiwan.
    If we relate to industry structure, Taiwan is perpendicularly integrated especially in PC industry…

    Acer is 1/15th the size of Samsung…and we can talk all day on the pros and cons of vertical integration.

    …and it is the competence of Taiwan with monopolizing 90% of PC manufacturing of world.

    And beware the wrath of China… PC manufacturing isn’t exactly hi-tech anymore. I would suggest that she invests more on ‘branding’…more resistant.

    Borrowing foreign money was only choice for Korea to invest because Korean deposits and savings are not enough unlike Japan and Korean finance market is not transparent so that foreign funds do not invest directly.
    Korean Banks, which borrowed foreign money at short term, lend to Korean biz at long term.
    The deficit of term causes financial crisis and the financial crisis brings about currency crisis.
    Devaluation of currency blows up foreign currency borrowings conversely.
    In order to reduce this risk (throw the risk on foreign funds), Korea must transparentize the finance market.

    Don’t know about the relative saving rates of those countries, but I conceded your above points already. Agreed, and to my knowledge had been largely reformed, per condition of the IMF bail-out.

    Here, I have a few questions though I should have asked before sleep.
    I atribute the curse of the non-transparency to the unique investment structure called ‘Circling Investment’, which is prohibited in global std commercial code.
    The name is my direct translation as it exists Only IN Korea.
    Q1: How it is legalized in Korean commercial code?
    There is national-loan-like bond in Korea called ‘Currency Stabilize Bond’ issued from central bank and excluded from primary balance.
    The name is also my direct translation because no other country’s central bank issues such bonds.
    Q2: The warrant, the buyers and the excluding reason?

    Don’t know about them, and I’ll look them up if I had the chance, but I was never interested in finance, more of a ‘trade’ guy. And even so…that was a long time ago.

  48. comment number 48 by: Ken

    Kjeff,
    Of course, some influence is enevitable when neighboring countries are hit by financial or currency crisis.
    But Taiwan was not stricken by neither of them.
    The deficit of foreign currency reserve between the 2 countries is not so large as meaningful.
    The difference is that Korea was bearing significant debt by national bond, etc at the same time.
    So even the significant foreign reserve did not make any sense.
    Too much issuance of national bond was pointed out to improve by IMF after the default.
    Instead, Bank of Korea is issuing ‘Currency stabilize Bond’ to pull down exchange rate now.
    “Acer is 1/15th the size of Samsung…and we can talk all day on the pros and cons of vertical integration.”
    That is the very point with putting aside the fact there was even conglomerates in Taiwan.
    I am translating an extreme example in a blog of analyzing Korea.
    A promoter invests M$2 to set up a company.
    With the M$2, the company sets up a child company.
    With the M$2, the child company sets up a grandchild company.
    With the M$2, the grandchild company sets up a great-granchild company.
    With the M$2, the great-grandchild company buys up all stocks of the 1st parent company from the promoter.
    4 companies capitalized at M$2 appear seemingly but there is no money inside.
    When an outsider buys half of the stock of any 1 company at M$1 and the companies are liquidated before neither earnig revenue nor spending cost, the outsider can get only $K250 back.
    Or when an insider buys all stocks of any 1 company at M$2 and make them invest round alike,
    4 companies capitalized at M$4 appear seemingly but there is no money inside after all.
    Stock price rises but all indexes based on ‘Circling Investment’ are fictions.
    I think the buyers of this exploitable stock are non-Samsung Koreans who do not know this structure or those who are offered so preferential stock as can exceed the huge risk.
    Acually, most of Korean banks are owned by hedge funds and their dividend is 70 – 80% of profit.
    These look new cast and colony of the 21st century.