Monday, March 1, 2010

Hardscrabble Economics Part III



Looking at 2010, the year of the tiger, let us now have some light of reason about China and the Chinese people. How will our nation deal with the nation of China in the world market place? All the people of the world are watching and judging the products and services of our nation.

While some republicans and many myopic entertainment news people here in the USA endlessly debate the merits of "big" government the Chinese continue to pump up their infrastructure and invest in the future of their nation. The historical record gives us a fitting name for those old guard republicans who delight in obstructing our government. In the 1850's the republicans proudly called themselves "Know Nothings."

Some Chinese people I knew in Beijing in 2007 told me that infrastructure was the most important priority for their nation. There is talk by some USA cable news pundits that the Chinese economy will certainly soon "stall." Believe me, there is zero chance that the Chinese people will allow their economy to "stall." Just like the people of the USA, the people of China simply want a better life for themselves and their families.

In our recent past we have a capitalism of government financed research into things like high-tech devices and high-speed communication and high-speed transportation. The good old gigantic US government invested in NASA (1958), and DARPA (1958), and the interstate highway system (1956). NASA gave us integrated circuits. DARPA gave us the internet. And we all must have driven forever on the Interstate commuting somewhere here or there.

All this came about under the guidance of our good, genuine Soldier-Politician, President Eisenhower.

Ike was our last helpful republican in the oval office.

Yes, we do miss him don't we? Good old Ike oversaw the rise to imperium of the iconic, capitalistic American military-industrial complex.

While our Tea Party people and Know-Nothing republicans sling slurs and pose for the cable TV news the Chinese are building... not debating... a new high-speed rail system of thousands of miles to link all the major cities of their entire nation.

What do those Tea Party and Know-Nothing types want for us here in the USA?

Those "keep-our-government-little-so-our-small-minds-can-easily-understand" types have only allowed the congress to budget a few miles of high-speed rail from Tampa to Orlando, Florida probably as lip service to Disney World and Mickey Mouse.

So is our dear old USA doomed to downsize into something more "mouselike" if we continue down this path of fear and denial of thinking and doing the big ideas? Now more than at any time in the history of our republic do we need all the people to think big. The modern world is a strongly competitive place. We as a people must raise the bar and strongly get moving into the future.


Ric said...

Dear Martinshushu,

Did you know that 36.3% of the Chinese still make less than $2 (purchasing power parity -ppp) a day? That means they only make enough to buy what $2 will buy you in the US.

On the other hand, of the twenty most free-market nations in the world (Hong Kong, Singapore, Australia, New Zealand, Ireland, Switzerland, Canada, United States, Denmark, Chile,United Kingdom, Bahrain, Mauritius, Luxembourg, The Netherlands, Estonia, Finland, Iceland, Japan, Sweden) only Chile has any population who earn below $2 ppp(2.4%). So to disparage Hayekian economics in such a manner seems ill-researched. Low taxes and low spending does lead to prosperity that lifts even the poorest of a society. This is what the research shows.

The problem with having a democratic government (as opposed to China) use an industrial policy that picks-and-chooses which industries to fund is that politicians are in charge of these decisions. For every dollar to legitimate research like NASA or DARPA (I can't believe you referenced DARPA positively), there are many more dollars going to farm subsidies, combating "goth" culture, HUD overpayments, the latest public employee union cause célèbre, or whatever crooks that bribed Tom Delay, Robert Byrd, Daniel Inouye, etc. China doesn't have to deal with any of that crap because the politburo doesn't answer to anyone. So they don't need campaign donations. They can make much more prudent decisions. But this still doesn't guarantee that they will pick the right industries to invest in. I believe that history shows that a country should make the environment business-friendly for all sizes of business, so that the entrepreneurs of your society can flourish and bring us the next Apple, Nike, Southwest Airlines, etc. But if the government picks favorites (which is the core of Keynesian economics), it is in their best interest to squash any upstarts. And trust me, they will do it.

In summation, when China has a gdp per capita and <$2 ppp rate comparable to the United States. I'll rethink the Hayekian principles. Until then, let's stick with the free market.


Martinshushu said...

Begin forwarded message:

Reply From: Martinshushu
Date: March 10, 2010 12:24:10 PM PST
Subject: My Blog Is Blocked...

Dear Ones,
A rough translation of the message I got above from a friend in Beijing is that my Martinshushu Blog cannot be accessed in PRC.
Regrettably my Blog has now been blocked by the authorities in Beijing.
The transformation to the purest form of radical capitalism is complete.
I guess this means the PRC has gone completely FoxNews.
Maybe that little Queen Glenda Beck and her new boytoy, Massa will make an appearance on Tianamen Square soon.
Oh well...