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The 'Bubble' Decade

The 21st Century's 10 Most Absurd Phenomena


The 21st Century's 10 Most Absurd Phenomena


The world will soon enter the second decade of the 21st century as 2010 rolls in. For many, the first decade will be remembered for burst bubbles, and Taiwan was no exception.



The 21st Century's 10 Most Absurd Phenomena

By CommonWealth Editorial Staff
From CommonWealth Magazine (vol. 438 )

Defining the 21st century's first decade begins with explosive bubbles: the dot-com bubble, the financial bubble, the real estate bubble, the Dubai bubble... One market after another became inflated in a binge of excess only to collapse spectacularly in front of the entire world.

Many of these bubbles' epicenters were located in the United States, seriously tarnishing America's reputation and leadership position.

Taiwan also had its bubbles -- the democracy bubble, the university bubble, the professional baseball bubble – all important symbols of the past 10 years. The key, however, is to identify the mounting threats left behind by the 21st century's first decade and understand how they will impact Taiwan and the world over the next decade.

Karl Marx famously said: "History repeats itself, first as tragedy, second as farce." After a decade of burst bubbles, what potential "farces" should we be worried about?

CommonWealth Magazine has compiled the 10 most absurd phenomena of the 21st century's first decade. Which among them will still be felt over the next 10 years?

1. Chen Shui-bian: From poverty to global money laundering

When the former president's name is uttered, it either evokes profound sighs or bursts of epithets.

Having grown up as a child in a poor family in rural Tainan County, he rose to become the first president in Taiwan's democratic history to usher in a change in political power. But after eight years in office, he became Taiwan's first former president to be indicted and convicted on corruption charges. His wife and son were also implicated in the scandal.

The Chen case continues to burn as a slap in the face to Taiwan's people, setting back Taiwan's democratic development and leaving his Democratic Progressive Party supporters deeply disappointed.

2. The Constitution of the Republic of China (Taiwan) and the "Three Principles of the People"

Article I of the Republic of China Constitution's Chapter 1 "General Provisions" reads: "The Republic of China, founded on the Three Principles of the People, shall be a democratic republic of the people, to be governed by the people and for the people." But how many people today understand what the Three Principles of the People are?

The concept of "governance by the people and for the people" seems to have gradually lost focus. In recent years, government policies have bestowed tax cuts, tax exemptions and even tax rebates on the wealthy and big corporations, concentrating wealth in the hands of a minority. In 2008, Taiwan's top 20 percent income earning households earned 7.73 times the income of the country's bottom 20 percent, the largest gap in history. CommonWealth Magazine found in its 2010 State of the Nation Survey that 93 percent of Taiwan's people felt the large rich-poor divide was a serious problem, also setting a record high.

The government deliberately avoids the issue, and the people seem to have collective amnesia. The principles and ideals "of the people, by the people and for the people" in today's M-shaped society might be among the biggest eyesores of the decade's top 10 absurdities.

3. Greenspan: From "god" to "goat"

During his 20 years as chairman of the U.S. Federal Reserve, Alan Greenspan held the world in his hands and became recognized as the "god" of financial management and currency policy. But when the global financial crisis engulfed the world last year, he was fingered as one of the prime culprits.

His indulgence of Wall Street's bigwigs and his passive acceptance of investment banks and insurance companies issuing opaque derivatives caught up with the financial system when the real estate bubble burst, which triggered the subprime mortgage crisis and eventually led to the global credit tsunami. Greenspan later was forced to acknowledge his shortcomings, admitting that his free-market ideology was flawed.

Today, looking back at the central banker, who was considered a "god" at the end of the 20th century, cannot but get people thinking about what went wrong with global capitalism.

4. The dot-com bubble: The crumbling of the technocentrism dream

It may seem just a distant memory now, but the 21st century opened with the dot-com bubble. Beginning in the mid-1990s, ".com" companies burst onto the scene, and their share prices soared as investors bought into the dream of a "new economy."

In 2000, however, the stock market began to crumble, and on April 14, or "Black Friday" as it came to be known, the Dow Jones Industrial Average took its second biggest fall in history, losing US$100 billion in value in one session. Between March 2000 and October 2002, the Nasdaq's market value plunged from US$6.7 trillion to US$1.6 trillion. The share prices of newly formed ventures took a beating, and bankruptcies were commonplace. Even Yahoo's share price plummeted from US$100 before the bubble burst to less than US$5.

Newfangled terms such as IPO, option, price-dream ratio, and cash-burning helped inflate the century's first major bubble. Yet fewer than 10 years later, Wall Street's greed absurdly fueled the reappearance of a new bubble.

5. The Dubai experience: Mirage and myth

The seven-star Burj Al Arab hotel, the Palm Island Resort, the Dubai World Islands, the Burj Dubai – one after another they shocked the world and drew the lavish praise of international media. Learning from the Dubai experience was the hot mantra for a time.

Dubai was a product of the rapid globalized expansion in the early part of the 21st century, taking on a mound of debt to finance property development and attracting investment from speculators around the world. But after the credit tsunami swept the world, the property market bubble began to deflate, real estate prices plunged, and speculators pulled out. Dubai's carnival ended in collapse.

The emirate is this century's biggest mirage to date. So-called miracle projects that harmed the environment, such as building a ski resort in the desert and reclaiming land to recreate the world islands on the sea, lacked a solid economic foundation and ultimately could not stand the test of reality.

6. The university bubble: The devaluing of diplomas

One of the key elements in education reforms undertaken in 1996, a policy to increase the number of Taiwan's universities, brought the number of colleges and universities to 147 in 2008, up from 67 twelve years earlier. In a country fighting a declining birthrate, that meant that a student scoring a 7.69 on the joint college entrance examination last year out of a possible 500 could gain admission to a local university. Incredibly, one university could only recruit 14 new students this year despite the declining admittance standards.

The admission rate of Taiwan's universities has gone from 40 percent in 1991 to 61.35 percent in 2001 to 97.14 percent in 2009. The streets are now full of college graduates, but they comprise the demographic group with the highest unemployment rate in Taiwan, raising concerns over the caliber of Taiwan's university education and its college students.

7. Taiwanese-style elections – Bad apples, black apples, poison apples

"The people are the masters" and "choosing the best and the brightest" are lofty slogans in democratic politics. The reality, however, rarely lives up to the rhetoric.

One of the distinctive traits of Taiwan's democracy is that elections are held nearly every year. Taiwan's democratic elections are also unprecedented in the ethnic Chinese world. But the quality of the candidates people can vote for has progressively declined. Many are either gangsters or members of local factions, or bought out by illegal money or corporate interests. Voters can only choose from a batch of bad apples.

In this year's local elections on Dec. 5, cases of vote-buying and violence were common, driving home again the realization among voters that they have never been the real masters of the country. Taiwan still has a long way to go before achieving true democracy.

8. Professional baseball players caught throwing games

The game seen as Taiwan's national pastime has recently broken the hearts of its citizens.

Players from the La New Bears and Brother Elephants of Taiwan's Chinese Professional Baseball League were implicated in the latest game-fixing scandal, including stars Chang Chih-chia and former U.S. Major League player Tsao Chin-hui. Whether the league can even survive the crisis remains an open question.

Gambling and game-fixing have plagued the league since 1996, and the latest scandal made local fans realize that they may have been watching "fixed games" for much of the past decade. And aside from expending their energy and enthusiasm in supporting these allegedly corrupt players, Taiwanese fans may also have to foot the bill for their pensions in the future.

9. Hard work yielding little reward

The working hours of the average Taiwanese consistently rank among the top five in the world, but local residents wonder why despite working harder and with more dedication than others, they seem to be earning less than before.

Over the past 10 years, the real wages of Taiwan's salaried workers have contracted. According to the Directorate-General of Budget, Accounting and Statistics, average nominal wages in the first nine months of 2009 fell a record 6.23 percent from the same period a year earlier. After accounting for inflation, real wages had reverted back to their 1997 level.

The 2009 IMD World Competitiveness Yearbook found that the real productivity of Taiwan's workers ranked fourth among countries in the Asia Pacific region, higher for example than South Korea. But according to a survey by international human resources consultant ECA International, Taiwan's average wage growth rate in 2009 was second to last in the region and ranked 50th in the world. South Korea, on the other hand, ranked sixth in the region and 24th in the world in the same category.

Taiwan's central bank governor Perng Fai-nan has been given an "A" rating by Global Finance magazine on its "Central Banker Report Card" for five straight years, so why has the wealth of Taiwanese declined the more they save and the value of the country's currency shrunk?

10. Taiwan's Ubiquitous Fraud Rings

Criminal fraud rings could be described as one of Taiwan's most innovative "businesses" that show the greatest ability to successfully re-engineer themselves. They prey on all layers of society, from famous doctors and performing artists to food vendors, housewives, and retired seniors, and the government seems powerless to do anything about them.

These vertically integrated rings operating on both sides of the Taiwan Strait have plenty of customers, are commercially and financially innovative, and are "internationally competitive." The government has failed to come up with any tools to fight these modern criminals except for a "165" hotline to report fraud cases (and even that hotline at one point was redirected to a fraud ring) – perhaps the best example of "black humor" in the 21st century to date.

Also, the fraud rings have already extended their operations to other countries. Aside from setting up a main platform in China, they also have presences in Thailand, the Philippines, Indonesia and even South Korea, to the point where Korean police came to Taiwan to learn about the groups and their methods.

Translated from the Chinese by Luke Sabatier