Hell yeah! What’s this global crisis all about? Am I living in a safe, warm cocoon here in Shanghai? The Chook and I mostly live on one income and stick away the other. Yet I read in a recent Time magazine article on the global crisis, titled “The Great Fall”, some scary stuff, or rather stuff that I assume is supposed to scare me. The authors say, “blaming this bank or that is somewhat beside the point. The thing to do now is to find a way out of this mess, because the scale of it is truly frightening”.

Why must I automatically be frightened? And how is being scared shitless supposed to help? Americans, judging by all the ones I have discussed this with, and their media, from Time to movies and TV serials, seem to thrive on fear. (The latest issue of Time, March 9, has a headline blaring “Holding on for dear life” with two hands holding onto a rope with one thread left, about to snap.) I will be first to admit that maybe I am being glib here. It is easy to say this when we are relatively in a good position. I realise there are a lot of unemployed people losing homes etc, and being unemployed is a scary place to be. I know. Been there, done that, couldn’t afford the T-shirt.

On reflection, we do live in a cocoon here in China. The same Time reporters regard China as still “booming”. We just haven’t been affected at all, except positively. For instance the RMB has strengthened considerably against the currencies that matter to us, South Africa’s and New Zealand’s.

I do not like the Time article’s proposed solution: “The US in particular has run up huge debts; Asian nations, led by China, have become enormous pools of savings and reserves [amen, brother: more power to that, praise the Lord and pass the fried tofu]. One day, those imbalances will have to be unwound, preferably by fundamental changes to domestic policy that encourage saving (in the US) and spending (in China) [say what? Hey guys, I happen to live here, no way!].”

Why must the Chinese automatically spend more, cut into their savings? The West should be learning from the Chinese, not encouraging them to imitate their idiotic spending habits. Sure, I understand the cash flow (China) and the shoring up (US and others) is going to help boost the global economy. But reading articles like this makes me feel the world’s leaders are almost at a loss. There is so much disagreement on solutions.

The core reason for the crisis is not being held to the light enough. The real problem is us: greedy, selfish and our utterly insane consumer spending. The Chook and I were often guilty of that kind of neurotic spending but we have become a lot better. Why?

This is because we live in China. Like changing one’s accent when in a different country long enough, you start to behave more and more like those around you. For example, lunch in China is 11am or 11.30am. Before, I could never eat at that time. Lunch for me, typical Westerner, was 1pm. Now I am always hungry at 11am.

The problem is we are not aware of our crazy spending. It is an unconscious behaviour. One definition of enlightenment is to be totally aware of what one is doing, “to be fully present”. We are not. Here’s a simple, typical example.

I used to drink a lot of coffee, which I virtually quit a few months ago, cold turkey. I only drank in the morning and was averaging about seven cups. On the way to teach I would often think nothing of buying a box with a dozen or so sachets for about 12 RMB which would last me two days. My Chinese colleagues in the office said that my coffee was very expensive. That is a typical response of theirs; they are penny pinchers. I now drink tea, and, thanks to the new Marks & Spencer which opened up in Shanghai, I drink Fairtrade extra strong for only 25 cents a bag. They are re-usable, so often it is twelve and a half cents a cuppa.

Silly example? Nope. Here is the math. It costs me about 78 cents a day to drink tea as opposed to roughly 6 RMB a day to drink coffee. Let’s look at this over 10 years. In 10 years I would spend about 2 800 RMB on tea as opposed to more than 21 000 RMB on coffee. Of course it’s a lot more than that, if we take into consideration inflation, and even more if the money was invested in some interest-bearing account during that period.

Now just imagine applying that to all our spending habits. The financial result in our lives over 10 years would make a staggering difference. If you shrug your shoulders on this, then you are unconscious. You need counselling.

Westerners need to sort out their spending habits. It’s insane. Literally. I was insane, looking back now. You have to become objective about your habits (become conscious of them) and this happened when I moved half the world away to China. At one stage in South Africa I had two credit cards and a Woolworths card (the latter on about 24% interest compounding per annum) nearly maxed to the hilt. And a lot of it was unnecessary spending.

Okay, Rod, smash your denial. All of it was unnecessary spending.

A Chinese friend once joined us lawei, foreigners, at a pub and just drank a glass of free water. Us? I had an omelette for lunch and three vodkas and diet coke, costing me about 100 RMB. I just don’t do that any more.

Everything that happens to us is a teacher. The great contemporary Catholic mystic, Father Thomas Keating, once said, “Despair is suffering which fails to teach”. Here’s an example of an event-teacher. I recently quit a part-time job which I now regret. We are not saving as much, though more work is starting to come in again. We decided to spend less. No more:

1) Pubs.

2) Ordering in delivery meals.

3) Restaurants except maybe once every six weeks, and only reasonably priced places.

4) Chinese lessons. Tough one, but I just teach myself and abuse Chinese friends.

5) Dumb purchases. That Chinese-styled Noddy Badge badge (5 RMB) I just had to have now collecting dust in a box of other useless, purchased bric-a-brac.

I monitored the drop in spending. I was amazed. Well, we can nearly save as much as what we were saving before I quit that part-time job. That event was a great teacher, but I had to see it as a teacher first.

Back to the global soft and smelly. Here’s a naïve question, but often there is something lateral and worth pondering in naïve questions. Hell, children ask us simple questions all the time we can’t easily answer. Why is the sky blue? Why can we see through clean water? Why do we laugh? So here’s my question. What would have happened if the media did not tell the world about the financial pooh we are all in? Let’s really think about this, what would have then happened? Or we got told a lie, like we often are told; hey everything is just dandy and getting better by the day?

Heck, we read lies by politicians all the time. Bill Clinton once said he did put a joint in his mouth but did not actually inhale, which of course we are supposed to think makes a big difference. Maybe Monica Lewinsky didn’t actually swallow, which also makes a big difference.

I digress. I feel fairly confident that the placebo effect in medicine, powerfully proven time and time again, could be applied to the psychology underlying economic expectations. The simple urge that creates bull and bear markets is investors driven by greed and fear. What would have happened if people just did not know? Would markets have collapsed the way they did? If I didn’t hear the tree crashing on the empty island, did it really happen? It certainly does not affect me at all. Yep, naïve, but think cause and effect. The dissemination of information has effects.

On spending: I find penny pinching not imprisoning at all. It is tremendously freeing. Just do more things that don’t cost money. If only I knew twenty years ago what I know now, and it is so simple, which in turn is indicative of the unconscious nature of the spending sickness …

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Rod MacKenzie

Rod MacKenzie

CRACKING CHINA was previously the title of this blog. That title was used as the name for Rod MacKenzie's second book, Cracking China: a memoir of our first three years in China. From a review in the Johannesburg...

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