新编剑桥商务英语高级第三版 第Module 5 Module6

Module 5

5.1 A culture of debt

(page 47)

Economist

Perhaps

the

greatest

legacy

of

the

Federal

Reserve

Chairman

Alan

Greenspan is the way he transformed people

’

s attitude to credit and debt. During his

term of office not only the national debt of America, but also personal debt, increased

substantially.

Since

the

Great

Depression

of

the

1930s,

people

in

America

have

been

naturally

reluctant

to

borrow

money.

But

for

this

generation,

in

the

US

and

increasingly

globally, debt has become respectable. From an early age, young people take out loans

to pay their way through college and borrowing against equity in real estate is now at

record

levels.

Re-mortgaging

your

home

was

unheard

of

generations

ago:

a

second

mortgage was an indication of a household in trouble. But today it is routine.

All

this

is

possible

because

credit

is

easy

and

interest

rates

are

low.

Banks

are

encouraged to lend, and often do so irresponsibly. In some state it

’

s possible to get a

100% mortgage

–

in other words with no down- payment- equivalent to four times a

couple

’

s

combined

annual

salary.

The

market

is

constantly

coming

up

with

new

financial

products

and

new

ways

of

extending

credit

to

ordinary

people.

General

Motors, whose automotive business in decline, now sells home equity loans through a

subsidiary: it

’

s the only part of the company that has been

consistently profitable in

recent years.

The reason for this boom in money lending is clear- to fund consumer spending. As

long as people are spending, economic growth continues. In other more conservative

borrowing cultures, like Germany, economic growth has slowed because in times of

uncertainty people tend to save their money, rather than borrowing and spending to

make themselves feel better.

So

does

the

accumulating

debt

matter?

Some

say

that

as

long

as

asset

values

rise

faster than debt, there

’

s no problem. In 2005 Americans were twelve trillion dollars in

debt,

but

their

personal

assets

stood

at

64

trillion

dollars.

Others

argue

that

we

are

sitting on a time- bomb.

Asset

values

will

not

continue

to

rise

indefinitely

and

when

they

crash,

millions

of

people will be plunged into negative equity. Liabilities remain the same but assets can

go

up

and

down

in

value.

This

was

the

case

with

stock

market

values,

which

saw

sharp falls around 2000. Crisis was averted only because investors move their money

into real estate.

For millions of Americans this only confirmed the culture Alan Greenspan had been

promoting- debt is good. And if he turns out to be wrong- well, we all had fun in the

meantime.

5.2 Discussing costs

(page 52)

CA=

Cost accountant

GM

= General manager

CA

Look, we

’

ve got to do something. Doing nothing is not an option. Our margins

will just get squeezed more and more.

GM

OK. What do you suggest?

CA

personally, I

’

d recommend cutting the wage bill- either by laying some people off

or by freezing salaries.

GM

Neither of which are going to be very popular options.

CA

No,

but

the

alternatives

are

probably

worse:

reducing

material

costs

will

definitely

have

an

impact

on

product

quality

and

cutting

back

on

advertising

expenditure is only a short-term solution- it will hurt in the long run.

GM

No,

I

see that.

What

about

administrative

costs or other overheads?

Instead of

cutting staff, we could try and do something about getting our energy bills down for

example.

CA

I’ve

already done as much as I can in those areas. I have thought about this a lot

and for me, the only real solution is to tackle labour costs. It may be painful, but the

advantage

of

it

would

be

that,

once

done,

we

could

get

back

to

concentrating

on

selling.

GM

OK, I hear what

you

’

re saying, but I think it might create more problems than

you think.

I’

m going to go away and think about it

…

see if there is an acceptable way

of doing it.

5.3 Exam spotlight, Key skill

(page 54)

We

are

accused

frequently

of

doing

nothing

about

the

ageing

population

and

the

consequent hole on pension funds. But you have to understand that, at the moment at

any rate, there are no popular solutions to this problem. Either we raise the retirement

age or we increase taxes on working people. Neither of these is a vote winner. I think

a lot of us in government are hoping that if we just hold on a bit, then sooner or later

another solution present itself.

5.4 Exam spotlight, Exam practice

(page 55)

1

I

don

’

t

believe

in

the

capital

markets.

For

a

start

they

are

unpredictable

and

for

another thing, not everyone the possibility to take such risks with their money. I have

always

been

of

the

view

that

you

pay

taxes

through

your

working

life

in

order

to

enjoy certain benefit from the state and certain protection against difficult times. For

example, in case of unemployment or sickness or for your retirement, for that matter.

So when I retire, I will live on what the government is due to give me. If I can

’

t afford

cruises in the Caribbean, then that

’

s too bad.

2

I

am

very

lucky

to

have

worked

in

the

civil

service,

which

has

its

own

pension

scheme. My salary has never been as good as it might have been in the private sector,

but

you

accept

that

when

you

work

for

a

public

service.

What

you

do

get

is

job

security,

longer

holidays,

good

medical

insurance

and

an

excellent

pension.

My

pension is calculated as a percentage of my

final salary. That’

s very rate in the private

sector.

Usually

private

companies

take

your

average

salary

over

a

period

of,

say,

twenty

years.

So

all

in

all

I

expect

to

be

very

comfortable

when

I

retire,

even

if

I

haven

’

t had that much disposable income during my working life.

3

People think that as a company dire

ctor, I’

m bound to have all sorts of privileged

pension benefits and company schemes going on-some special executive plan. But it

’

s

not the case. We have a company scheme for all our employees but I

don’t

actually

participate in it. Instead

I’

ve put most of my money in a long-term savings account,

that gives a good rate of return if you keep it in for long enough.

It seems bizarre I

know, but

I make far more than

I need to

spend and

I

guess

I’

m

naturally cautions

with my money.

4

There is a saying-

I don

’

t know who by- that you should

‘

invest in land, because