An idle Sunday afternoon amidst an economic depression

Tsang Shu-ki (21/6/2009)

It’s difficult to imagine how bored one could become in such a hot Sunday afternoon in Hong Kong. I’m stuck at my small residential unit called home.

I shouldn’t complain too much. Just last Thursday, I had a wining and dining evening with good friends at an Australian restaurant in Wanchai, a bustling area on the Hong Kong Island. I almost suffered sun stroke in the 500 yards between the MTR station and the building hosting the restaurant. I can remember that the six of us had three large plates of Angus (yes, not Aussie) beef and prime ribs plus salads etc. As to the bottles of sparkling wine and NZ Merlot, that’s a good question. Who actually paid the bill anyway? I hope we got out legally.

Yesterday, having not much to do, Joanne and I drove out to search for a newly opened hotel near a university in the New Territories. Somehow, in our non-GPS-directed car, we went into the university, only to be told that we were on the wrong side by the two kind gentlemen at the toll gate. The hotel was “there” – and they could point to it. We were allowed to make a U-turn, with no charges. Back on the main road, I drove backward towards Kowloon, forward to the north, around roundabouts, turned left, and left, and left. Then we arrived. Parking was free!

After all these self-inflicted labouring efforts, we decided to spend what remained of the afternoon in the bar and later had our dinner there (with incredibly agreeable Chinese dishes).

You have the right to suspect that I’m decadent. My only defence is that presently I have very limited choice in deciding where to relax and enjoy in this stifling island of high physical temperature, disheartening political doldrums and economic cascade dressed up (by the stock and housing markets) as a hopeful U/V rebound from the worst economic disaster for many decades.

Moreover, there is a rapid spreading of the surprisingly mild H1N1 “pandemic”. Many are laughing at official “over-reactions” (compared with “under-reactions” during SARS in 2003). I, for one, reserve my pessimism.

* * *

OK, I have to do something socially more responsible. I browsed over the directories in my computer, did a quick check on the latest analyses about this once-in-a-lifetime crisis which doesn’t feel that bad as yet.

And there are two pieces which I can recommend to some of you bored hearts out there.

1. “The recession tracks the Great Depression”, by Martin Wolf on the Financial Times :http://www.ft.com/cms/s/0/b31c06a2-5a7a-11de-8c14-00144feabdc0.html?nclick_check=1

2. “A Tale of Two Depressions”, by Barry Eichengreen and Kevin H. O’Rourke:
http://www.voxeu.org/index.php?q=node/3421

In a nut shell, they argue that the unfolding economic downturn has so far tracked the Great Depression of 1929-1932 very closely, except the policy responses. Regarding the latter, the capitalist world has suddenly turned laissez faire monetarist and undisciplined Keynesian at the same time. Governments are throwing orthodox economics out the window.

* * *

Back to my more sober interpretation now. The fundamental causes have been rather similar; but the authorities are trying unprecedented rescue measures. The global economic consequence is anybody’s guess. In my humble view, it could be any or a mixture of the following patterns:

1. V

2. U

3. W

4. L

5. X

I won’t bet too much on the first two possibilities.