ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Melamine milk Scandals and Economic crisis

Updated on October 13, 2008

Several infants have died and thousands were hospitalized in China after drinking milk products contaminated with melamine, a dangerous industrial chemical. The Chinese government admitted that Chinese companies may have exported the tainted milk products. Consumers and health agencies from around the world are now rejecting Chinese milk products.

On the other side of the world, several financial institutions in Wall Street have filed for bankruptcy. Other big U.S. banks are expected to close down as well due to mounting bad loans and subprime losses. The federal government has readied a financial package to rescue these ailing banks.

Is there a direct link between the China milk scandal and the Wall Street crash? Perhaps not. But they are similar economic disasters which expose the downside of corporate globalization.

The drive for profit may have led the Chinese milk manufacturers to mix the harmful melamine chemical with their products. They endangered consumer welfare and violated business ethics in order to reduce production costs.

On the other hand, various U.S. credit agencies ignored banking rules and common sense when they approved housing loans to persons who couldn’t afford to pay their financial obligations. To prevent losses from these unpaid mortgages, banks created artificial financial instruments and traded them in the market.

It is safe to assume that Wall Street executives were aware that these speculative activities would undermine the stability of the market. But it seems the temptation to earn super profits was difficult to refuse.

Chinese milk companies and Wall Street were able to break the rules because of inadequate regulation. Health inspectors in China bungled their jobs. The U.S. government was unwilling to regulate the big transactions on Wall Street.

Economic damage, and deaths in the case of China, could have been minimized if both the Chinese and U.S. governments had intervened early and swiftly when the problem was still manageable. Chinese officials were informed about the tainted milk issue two months ago but they didn’t order the withdrawal of milk products from the market. They didn’t warn their citizens about the health hazards of drinking the contaminated milk. They didn’t stop the shipment of milk products to other countries.

When foreclosure cases in the housing sector began to rise a few years ago, the U.S. government should have devised an emergency plan to help homeowners and to assist the banking sector. But it didn’t act. It refused to tap public money to save the homes of its citizens. Instead, it expected the glorified market forces to fix the problem.

The financial mess got worse. Now the government will be using billions and billions of taxpayers’ money to bail out Wall Street. Thousands will still remain homeless but Wall Street executives will get their hefty paychecks.

The negative impact of the China milk and Wall Street scandals was felt worldwide, thanks to a globalized economy. Chinese milk and milk-based products are exported to almost all countries because they are less expensive. The melamine-infested milk from erstwhile socialist China is the “specter that haunts” the world today.

The Wall Street crash led to the weakening of other financial centers in the world. Global stock markets went down. The decline of the U.S. banking sector has affected the economies of small and big nations alike. It is not only the U.S. economy which is under threat of recession; global capitalism is in serious trouble.

But interestingly, the global impact of the China milk and Wall Street scandals has revealed the world’s dependence on the economies of China and the United States. The world needs China’s cheap goods and the stability of the United States, the world’s biggest consumer market.

Governments cannot afford to ban Chinese goods despite the spotty record of China’s export industry. China produces most of our daily needs, from toothpaste to bed pillows. In the same way, the world cannot ignore a bankrupt United States. The fall of capitalist America will trigger a global crisis.

Whether we like or hate China and the United States, they should be part of the solution the moment we decide to reform the global economy.

Did the world gain something from the China milk scandal? It remains to be seen. But it is promising to note that there are renewed discussions about the importance of breastfeeding, especially in the developing nations. Trade officials are now imposing better safety standards on Chinese export goods. It is hoped that China will improve the working conditions in its manufacturing sector.

Did the world gain something from the Wall Street crash? It is debatable whether the bailout program will be good or bad for the U.S. economy. Definitely there will be new banking regulations. Governments around the world are now reviewing their economic policies, especially those that concern the financial sector.

What is the symbolic relationship of the China milk scandal and the Wall Street crash? By providing the capital which fueled the economic investments in China, Wall Street somehow triggered a chain of events which led to the untimely deaths of numerous infants. Wall Street’s “fictitious capital” produced tangible results which the world’s poor had to bear.

For many people living in poor countries, the U.S. financial crisis looks and sounds too vague on TV. Few people understand what liquidation, credit crunch and subprime really mean. If the U.S. economy is falling, what are its concrete consequences which the global poor have to fear?

The infant deaths caused by melamine-tainted milk in China gave the public an image to visualize the horrific consequences of unbridled corporate globalization. Capitalism which obeys few or no rules leads to bankruptcies, homelessness and infant deaths.

Comments

    0 of 8192 characters used
    Post Comment

    • profile image

      Bobo 

      9 years ago

      Awesom :D

    • megamass profile image

      megamass 

      9 years ago from Portugal

      Great post! Thanks for the information!

    • funnebone profile image

      funnebone 

      9 years ago from Philadelphia Pa

      Very well thought out and written. Nice job.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)