South Korea: Kicking the Plastic Habit

South Korea's credit card boom has turned into a credit bust. Several of the country's leading credit firms are teetering on the edge of bankruptcy. While it would be a mistake to predict collapse — this is Korea, after all, where rapid economic regeneration seems to be genetically encoded — credit can no longer sustain the country's recent boom in domestic demand. Until South Korea can get back on its feet, it will have to depend more heavily upon exports to bolster growth. That will result in manipulation of the won and government policies that will increase friction between Seoul and Washington over trade.