16 May 2011

Chinese Growth on a Mountain of US Debt

Americans must be the most gullible simpletons in the world. They will believe anything. No fantasy is too absurd. No lie is too ridiculous. Much of what they now take for granted an earlier generation would have taken for preposterous, outrageous, and criminal.
According to presidential candidate Donald Trump they are prepared to believe that China is to blame for their financial problems... No kidding. When asked what he'd do to fix the US economy, 'The Donald' says he'd 'get tough with China.'
What dastardly thing are the Chinese doing? What devious, underhanded act are they committing?
Ah ha! An act of commerce! They're delivering quality products to America at discount prices! Trump says he'll slap a 25% tariff on Chinese-made goods.
How exactly this would be better for Americans he didn't explain. Says our old friend Grover Norquist:
"Tariffs are not paid by the Chinese. They're paid by Americans who buy things made by the Chinese."
Americans are barely able to keep up with their expenses already; raising prices wouldn't do them any favor that we can see.
But in the US, crackpot ideas are as common as democrats.
In the '90s, Americans thought they could get rich by buying companies that weren't earning any money. Then, they thought they could get rich by buying a house. When that went bad, they whined for bailouts and handouts. And now they think the feds are helping them by printing more money. Honestly, you can't make this stuff up!
But their delusions don't stop there. They also believe that for the last 10 years the world's only super-power has been at war with 372 Muslim extremists. And that somehow we'll be safer if we let TSA agents grope our grandmothers and pat down our toddlers.
And how about this? It is obvious to the whole world that US Commander- in-Chief Obama ordered a hit squad to disappear Osama bin Laden; but in the USA, people think the SEALs were conducting a heroic military operation.
And they dumped his body in the ocean because they didn't want to offend the Muslim brotherhood.
You have to like people who would believe something like that. They're loveable half-wits...earnest morons with the skeptical intelligence of a puppy.
Nor does it bother them that their national financial plan is a calamity. Everyone who has thought about it for more than a second realizes that the secret to gaining wealth is to make money...save it...and invest it in new and more productive business opportunities.
And yet, the government's financial strategy for 4 decades has been to encourage consumer spending and borrowing, a program that is sure to lead to poverty.
This strategy did not boost real economic growth in the US. But it did wonders for China. We are now on a plane, en route to Shanghai from Beijing. China is supposed to be a poor country. But there is no evidence of it so far.
Instead, there are automobiles, highways, skyscrapers - as far as the eye can see. Factories by the thousands. Warehouses. Docks and freight yards. Plants. Mills. Apartment blocks that New York would be proud of. Office towers that Baltimore would envy. Trains. Loading platforms. Bridges. Storage yards. Assembly units. Round buildings. Square buildings. Rectangles. Ovals. Low rise. High rise. The scale of activity is breathtaking. And we haven't reached Shanghai yet.
Is there any description of China that doesn't end in 'st'? It has the biggest, newest, most daring and innovative buildings. It has the fastest trains...the most roads and cars. The richest. The poorest. It has everything.
It has people too... Smart, hardworking people. Instead of borrowing to boost their standards of living, the Chinese save their money in order to reduce their standard of living...boost the next generation's.
The Chinese have already pulled off a miracle. It has only been 32 years since Deng Xiaoping opened up China to making money. In that time, the nation has gone from a third world dump to the world's 2nd largest economy...whose growth rate continues to be shocking.
What's their secret? China is a zombie-free zone. The 'safety net' is thin here. There is plenty of corruption and inside dealing, no doubt. But people work hard...save their money...and expect to live by their own efforts.
But the Chinese have gotten a lot of help from America. The feds encouraged Americans to buy things they didn't need with money they didn't have. The Chinese merely took the orders...and the money. Now they have the biggest stash of dollars in the world, while the US has the biggest, stinkiest pile of debt the world has ever seen.
And more thoughts...
We have just had our best airport and hotel experiences ever. Arriving at our hotel - the China World Hotel in Beijing - the staff again met us at the entrance. They greeted us by name and showed us directly to our rooms. There was no waiting to check-in. There were no lines. There were no incompetent or surly flunkeys.
Then, we drove to the huge Beijing airport - the largest in the world. There, uniformed airline employees met us at the curb...took our luggage...and whisked us through the check-in security process. The whole thing took only minutes, with almost no waiting at any step. It was a pleasure.
*** "You haven't seen the real China," one of our Dear Readers who has lived in China for many years explained. "You're just looking at the top cities. It would be like going to the US and only visiting New York and San Francisco. You wouldn't have a very good idea of what the country is like.
"If you go out to some of these second and third tier cities, you get another picture all together. They're pretty grim. And poor. And there are still millions of people who earn almost nothing.
"These poor people keep coming to the cities to find work. The government knows it has to keep the economy growing so that these people don't become a problem. But so far, I've been very impressed. The people running the country may be communists, but they're not stupid. And to tell you the truth, this is a much better system than we have in America.
"I don't know why the US would want to push democracy on the whole world. And I don't know why Hillary Clinton would want to lecture China about human rights either. China isn't intentionally killing people. China doesn't have troops in other countries. China is minding its own business...and building its economy - just like America used to do.
"And not having a democracy is really a good thing. A benign dictatorship can make the kind of changes you need to make. That's what they do here. They can do things that require huge capital investments but only pay off far in the future. They can do things that are unpopular, because they don't have to stand for election every 4 years.
"That's why the US is such a mess. We're digging ourselves a deeper and deeper hole each year. But nobody can stop it. Because every member of Congress has to face the voters. And the people who vote are also the people who benefit from government spending - especially teachers and retirees. So you can't fix the problem. It just gets worse and worse until it falls apart.
"Democracy is very overrated."

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