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How China Ate America's Lunch

Luc Vallee's picture





 

In response to one of my recent posts, #999999;">The Sceptical Market Observer: A New Set of Crisis Villains, Clif Carothers sent me a very insightful and elaborate comment on the relative evolution of the economies of China and the United States over the last 35 years. He claims, very convincingly, that China has deliberately and successfully exploited Europe and America’s wealth to leverage its own development. Less a conspiracy than a brilliantly executed plan, the bottom line is that China’s strategy worked. The brilliant exposé below should be an eye opener for most.

Originally entitled “Kyoto Protocols Would Have Accelerated China’s Plan to Reverse-Exploit EurAmerica”, I changed the title of the piece because Clif’s thesis covers much more ground. It is a fascinating story and I am very proud to present it here.

If you are patient and read the whole piece, you will get to the Kyoto Protocol part of the story. America’s response to Kyoto somehow suggests that not everyone is sleeping at the switch. But as Clif discusses towards the end of this post, the level of awareness about what needs to be done in this country needs to be raised if we are to succeed in getting back into the game.

Here it goes:

My set of Villains...

China had a better strategy and executed it brilliantly

Multinational Corporations (MNCs) saw an opportunity to ride the wave of America's destruction for profit and the business of business is profit so...

Bankers are in the business of transferring capital flow to the highest returns and those are to be found in China so..

Politicians are in the business of getting elected and that comes mostly from having more campaign funds from MNCs and bankers than one's opponent sooooooooo....

In 1978, the year China emerged onto the world stage with its four modernizations, China, a country with four times the population of the United States, had a paltry gross domestic product of $216 billion, less than eight percent of the United States. China exposed her strategy of four modernizations to the world as if to say, “Please invest in China and we will ensure that our workforce is educated, and that our business infrastructure is stable for your investment.” Yet, this openly expressed strategy, that may have seemed to the rest of the world as a difficult but noble goal for China to achieve, was only the tip of China’s Grand Plan, and only the part she wanted the world to see.

EurAmerica’s history with China was one of gunboat diplomacy, exploitation, and forced trading. When China opened her borders again in 1979, EurAmerica’s merchants were enthusiastic to exploit an opportunity again. Yet, China had not forgotten EurAmerica’s role in the Opium War, the Sino-Japanese War, and the Boxer Rebellion. China would never open her border again to be exploited. When she finally opened her border in 1979, it was from a position of power, deep strategy, and long lived planning that suggested EurAmerica was finally ripe for reverse exploitation. China’s grand plan was to emerge as the 21st century world power.

What boldness of purpose China must have felt as she aligned her nation’s efforts to that decade’s long task. Looking back today on her impossible achievements, one must give pause to the monumental economic goal she set for herself in 1978, indeed greater than America’s technical goal of landing on the moon early in 1961. Yet, with such a miniscule $216 billion GDP and few material assets how could China possibly build her empire to surpass that of the United States?

Through a hybrid statist-capitalist political structure, China would create a conduit through which American businesses would willingly draw down the wealth of Europe and America and transfer it to China in order to share in the prosperity of that wealth transfer. Through the centralized imposition of forced savings on its people, China would provide low cost labor to sell goods at low enough prices to cause EurAmerica to look the other way as their neighbors’ jobs went to China. Through low interest loans, China would entice EurAmerican politicians to spend beyond their means to temporarily ease the pain of EurAmerica as China’s sucked away their life force. These were the basis of her strategy.

Similarly to how a business cycle contains early adopters and late stage laggards, China planned a capital extraction cycle for EurAmerica, in which China would extract capital in multiple phases, each phase having an optimal extraction strategy. First extraction would be through the early adopter “gold rush” investors rushing into China to stake a claim. China would also plan for early majority, late majority and laggard’s capital extraction.

In 1978, China assessed America’s assets:

• America’s most valuable assets were intellectual capital that resulted from 200 years of publicly funded primary and publicly subsidized secondary education

• America’s physical assets included business assets, commercial, and residential real estate worth $7 trillion in addition to public assets of land, buildings, and infrastructure

• America produced 26% of the world’s GDP at $2.8 trillion and consumed a quarter of the world’s goods

• America’s debt was as low as it had been since WWII as a percentage of GDP and its 110 million workers were capable of doubling their loans to provide China more capital

• America’s Baby boomers were entering a peak spending phase followed by peak saving

• America’s constitutional republic allowed a relative few capitalists to control the direction of her economy

By 1978, multinational corporations had steadily grown in number and size for two decades. China’s success depended on corralling MNCs through direct foreign investment to create massive inflows of capital quickly monetized as hard assets and infrastructure.

China would entice merchants to invest by offering access to the future potential purchasing power of its people. However, given China’s low household incomes, market penetration would be low to start. Therefore, to entice the early adopters, China would create special economic zones that provided the perfect investment opportunity of cheap educated labor, loose regulation, low taxation, strengthened business law, and enhanced infrastructure and transportation, in which businesses could produce goods at very low arbitrage costs to sell back to their home countries for high margins.

With low cost of goods from special economic zones, early adopter businesses were highly profitable and banks poured investment into China as a result. But, China could not complete her Grand Plan to multiply her GDP 50 times by enticing early adopter investors alone. She had to implement a plan timed to extract maximum dollars from EurAmerica at each phase of her exponential growth.

During the next stage, the early majority stage, China manipulated baby boomers’ peak spending phase:

• China’s low prices secured America’s baby boomers as loyal customers

• Prior to America noticing a substantial loss of jobs, China secured free trade agreements, and mined American businesses for their intellectual capital.

• She reinvested profits back into America’s debt to keep America’s interest rates artificially low in order to spur on higher levels of consumer spending and government borrowing.

• China supported lobbying of America’s mass investment vehicles to fund MNCs. 401Ks and IRAs, created in ‘80and ’81, funneled money through the stock market into MNCs for investment into China.

Then, America was drawn into the late majority stage as America’s baby boomers entered their peak saving years. 401Ks and IRAs artificially fed the stock market frenzy. Baby boomers sensed they knew how to invest in a bubble market that kept rising. With access to low interest rate loans kept low by China’s reinvestment, speculators borrowed money to bet on the rising stock market. America ultimately increased its debt to pump up stock values to build more Chinese factories.

Inevitably, the stock market bubble burst, leaving America’s baby boomers with lower retirement savings. The stock market that seemed destined to go up forever finally reversed rapidly decreasing valuations. However, the debt that had funded its escalation remained.

During the late majority phase:

• More businesses began to invest in China just to remain competitive with businesses that had moved offshore earlier.

• Tens of thousands of businesses transferred factories to China to obtain low cost labor

• Millions of Americans lost jobs

• With a generation of education completed, China now was able to take more advanced jobs as well as factory jobs. America’s bastion of protected, more technically competent jobs was not a bastion after all.

• American retail outlets for Chinese goods grew exponentially

• China continued to loan its excess profits back to the American government to keep interest rates low.

After having lived through the weakness of the stock market, real estate appeared to be the baby boomers’ best retirement savings alternative. In the early stages of the Great Ponsi, housing prices went steadily up. With low interest rates, Americans could now borrow on the value of their homes to continue funding China’s growth. China’s final stages of extraction saw the housing bubble increase beyond what had ever been experienced before.

Even though American jobs were increasingly being driven offshore, the frenzy of increased housing prices allowed additional borrowing from Americans, feeding the China gold rush further. This behavior was not unexpected, following a pattern of historical boom-bust cycles and was part of China’s planning. As a result of the stock bubble and the housing bubble, America’s total debt had risen to over $55 trillion. With such exuberance in the housing market, secondary debt markets participated in credit default swaps to the tune of an additional $42 trillion. China now had extracted close to the maximum of America’s value, leaving America with the corresponding debt.

So China extracted maximum value, first in trade secrets and early adoptive money, then by IRAs and 401Ks, then by stock market and home equity loans, then by 2nd mortgages and housing speculation. China monetized the massive cash flows as quickly as possible, building infrastructure and excess manufacturing capacity, while leaving America holding debt in exchange.

Without any other rising asset values to borrow from, America has tapped out its debt. Having maxed its debt, America can only print money to finance its trade deficits. Without further real debt derived money extraction to give China for infrastructure investment and without a real ability to pay for low cost Chinese goods, America is fast losing her worth to China as an infrastructure vehicle. Recognizing that maximized extraction and rapid monetization of America’s wealth is nearing its end, China is now finalizing the implementation of her strategy, that of pulling out of American debt before other countries that maintain reserve currencies create a run on the dollar.

In thirty short years, China was able to accelerate her GDP from $216 billion to $11 trillion. She amassed reserve capital of $3 trillion. She reversed America’s fortunes from the greatest creditor nation to the greatest debtor nation. She gutted America’s factories while creating the world’s largest manufacturing base in her own country. A measure of output that highly correlates to GDP is energy consumption. In June of this year, 2011, China surpassed the United States as the largest consumer of energy on the planet. While the U.S consumes 19 percent of the world’s energy, China consumes 20.3 percent.

In 1992, the world came together to discuss the impact of climate change resulting from energy consumption. The talks resulted in Kyoto protocols being initially adopted in 1997 that attempted to create a framework for reducing greenhouse emissions. The protocols called for 33 industrialized nations to reduce their greenhouse gases to 1990 levels and then to maintain emissions at those levels. Although it called for emerging countries like China to voluntarily lower levels, it did not require them to be mandated.

Of course, all of the countries who had no requirements to reduce their emissions signed the agreement. The United States, under scrutiny from environmentalists and others did not sign. China did sign. This was an additional strategy perhaps not envisioned in 1978 that nonetheless would have assisted in accelerating America’s slide had we signed.

GDP highly correlates to energy usage. In 1990, America’s real GDP was about $8 trillion as compared to $14 trillion in 2011. Kyoto would have caused America to either:

• Invest billions in the attempt to lower our energy usage per dollar of GDP

• Pay billions to other countries to have them produce less so that we could grow our GDP from $8 to $14 trillion

• Or, maintain our GDP at 8 trillion

In the meantime, China’s GDP in 1990 was $1.3 trillion and has since grown to over $10 trillion. China’s energy use has correspondingly grown as well until the point that this month, she overtook America as the greatest polluter. Kyoto was a grand idea that was doomed from the start because of the flaw that allowed the now greatest polluter to play by different rules. It attempted to cap the economic growth of America while allowing other countries to grow unfettered.

China had a Grand Plan that has been executed with the finesse expected of a centrally planned economy. Kyoto added nicely to that plan. America has been thwarted by China’s plan but now has the ability to reverse course. Given China’s size and growth rate, she will pass us soon if she has not already and her stride will be too great for us to catch her. However, by avoiding traps like Kyoto, and understanding that economic gamesmanship can accomplish a much greater destruction of a nation’s wealth than warfare ever could, perhaps America can once again right its course.

ME: When a reader then asked Clif , “Are you concluding that the US does or doesn't have a prayer in hell of recovering any momentum or GDP growth to nice numbers ever again?” here was his answer:

The remaining debt capacity of any size that is capable of being used to support renewal remains with America's MNC's and they have not yet been incentivized to return home. The capacity for new jobs is contained in our private small businesses but access to credit has been denied to them by our current banking structure. It needs to be bypassed. Our contracted economy remains too risky to hire new employees. Their wages must be subsidized to reduce risks. America continues to allow our trade secrets to leave offshore for a fraction of their worth. We must revisit our private property laws as they pertain to offshore sales and investments. China and other countries continue to bring goods into our country at a net negative benefit to our citizens. An overhaul of our trade policies is needed.

One hundred percent of our federal tax revenues are spent on the three Ms of military, Medicare and Medicaid. It's an abomination of national compulsion that must be reversed. Our deficits will soon trigger a massive run on the dollar; we are that close. We obviously must incur massive cuts in public spending. Public spending cuts of the size needed to reverse course on our debt crisis would trigger a depression without an offsetting spend on the private side, thus the incentivizing of MNCs and dollar shifting from unemployment benefits to employment vouchers that are required for the offset.

These changes are all quite doable and could help avert what will otherwise be America's darkest days ahead. The challenge will be to fill our representative democracy with those that both understand the problems we face and that have the courage to act boldly on them.

ME: And a further comment on the nature of the “Republic”:

As a furtherance of the discussion, a potential villain is that an upgrade to our Republic form of government is required. It suited us well and certainly better than earlier versions of Republic governments before ours had suited their people. However, Madison was right to be concerned. Yet all the protections placed within our federal system may not have been enough.

When asked by a political commentator whether or not he would relax his stance on Medicare and Social Security being off the table as far as debt ceiling negotiations were concerned, Senator Bernie Sanders of Vermont stated today (that was around July 8th) that the vast majority of Americans have stated they want the wealthy to pay more instead of them having to sacrifice to solve the nation’s debt issues. It seems logical that if most are suffering while a privileged few are prospering, that the prosperous may be in some obscure way responsible for others’ misery and that they should be the ones that pull us all out of the economic fire.

When it comes to solving our nation’s fiscal crisis, we are now in the “not in my backyard” stage of negotiations. No-one wants to feel the pain that we will all ultimately endure. The old saying that misery loves company is true for American politics. If any of us are called to sacrifice, we demand to see equal sacrifice by others as well. However, in this early stage of “not in my backyard”, we still are desperately hopeful that the evil doers will be caught and that justice will prevail without any of us having to sacrifice what we all had hoped would be our future prosperity.

Unfortunately, the size and scope of America’s travail is too great for any one American faction to accept full responsibility for its cause or to create a solution through their own efforts. We all must understand our small participation in America’s deterioration in order to rise to the calling for the responsible citizenship that will be required if we are to reverse our nation’s course.

If we cannot dispose of personal responsibility in our quest to blame others for our national predicament, neither can we blame fate itself. For those that say nothing can be done to right our ship of state because it was merely happenstance that placed China in the good fortunes of becoming the next great empire and not some nationalistic conspiracy that created China’s opportunity for preeminence, I would ask, did China’s leadership not conspire to achieve world fiscal dominance? Did America not conspire to achieve world military dominance? Did England not conspire to achieve world colonial dominance?

Do most world achievements occur through mere happenstance or are they the result of the greatest minds of the time conspiring to set the stage for dominating implementation? Interestingly, studies have shown that the difference between individual achievers and the vast majority of lesser men is that achievers create a written plan and then set about to implement it. If that is so for accomplished individuals, would it not be more so for great societies? No, fate is not the purveyor of our misfortune.

Our founders wrote in the federalist papers of their concerns for the eventual collapse of our country when they expounded on why previous republics failed. In creating our newest form of Republic, they studied the failures of others stating that when elites were able to place puppet politicians in the functions of government, their republics failed. While our founders created a system of bicameral government, overlapping terms of the house, president, and senate, shared system of government between local, state, and federal systems, all designed to thwart the overtaking of government by the elite, but they failed to realize the concentration of power that capitalism would eventually afford our elite over our political system as the centuries progressed.

China certainly had a strategy for mining America's wealth but it could not have been exercised if not for the weak underbelly of our political system. That underbelly was the dependence of political leaders on the fortunes of business and banking for their re-elections. This was the incipient crack through which the corruption of our American Republic began, and it is this symbiotic poison that we must now severe if we wish to avoid being dashed against the historical rocks of other failed republics, some of which also were the world’s political giants of their time.

 


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Sat, 07/30/2011 - 16:53 | Link to Comment Conax
Conax's picture

We'd have to bomb India, China, Viet Nam, Taiwan, Both Koreas, Thailand, Indonesia and Mexico back to the stoneage forever; stand down the Empire, rid ourselves of H1Bs and illegals, put up an economic barrier to the outside world, go back on hard currency, and remove tons of bad regulations on industry, slap heavy-handed controls on the thieving bastards of wall street and encourage everyone to get educated in engineering and production to re-start America's industrial engine.

And then we can jump on our unicorns and go to happy town.

They did a J O B on us, I'm afraid the patient is terminal.

Sun, 07/31/2011 - 16:43 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

Anglo white race bankers have run the developed world ...behind the scenes.

They want America brought down because America is the last obstacle to their global government plans.

Not America's government. America's government is eager to be part of a global police state government. American people are the problem. Freedom loving. Well armed.

So the American people have to be brought down. The easiest way is bring them down economically. All the way. Poverty.

Take away their jobs by moving manufacturing overseas. Encourage slave-labor nations like China to open up and accept foreign corporations. Wipe out the value of their homes. Allow unregulated speculation in commodities so food, fuel, and other necessities get very expensive, pushing Americans further toward poverty (and speculators make huge profits). Directly steal their wealth and give it to bankers via huge multi-trillion dollar bank bailouts and resulting hyperinflation. Yes, put 'em in poverty. That'll kill their freedom-loving spirit and turn 'em into obedient sheep. ...like the rest of the world.

Who cares about their guns? When they're broke and hungry they'll beg government for help and gladly give up those guns. It works every time it's been done in other nations. Sure, a few won't cave. They'll hoard food and weapons to protect it. No problem. Make everybody around them broke and hungry. Offer food and money to rat out the holdouts, and look the other way when holdouts are mobbed and killed. That'll take care of the holdouts.

When the American people are sufficiently weakened and subdued, move ahead with global police state government.

But there's one little thing the bankers overlooked. China won't play along with their global government plan.

Building up China's economy to bring down America's economy was a grave mistake. A fatal mistake. They created an uncontrollable monster with the strongest manufacturing economy on the planet, having no intention of going along with their Anglo white race global government plan.

Much to their shock and dismay they're watching China rapidly building up its military strength, approaching America's military strength and surpassing it in some areas.

They're watching in horror as China builds strong trade, monetary, and military ties with other nuclear-armed nations like Russia, India, Euro-nations, Japan, and Pakistan, some also having no intention of going along with their Anglo white race global government plan.

They see the handwriting on the wall. They see what's coming. A powerful China-led multi-nuclear-armed-nation economic & military alliance, having no intention of going along with their Anglo white race global government plan.

They fucked up. Royally fucked up. Plan A is toast. So it's plan B now. Loot as much wealth as possible from areas they control, Euro-nations, Britain, America, Canada, Australia, and get the hell out of town before that huge SCO steamroller gets here and squashes 'em flat.

America is toast. America has been the vehicle of those Anglo white race bankers and their multi-decade imperialist bullying around the world, looting and plundering nations ...now joining that China-led multi-nuclear-armed-nation alliance ...in hopes of payback.

And payback there will be. In spades. That China-led multi-nuclear-armed-nation alliance will finish the job those Anglo white race bankers started. First with oil, moving into the middle east, kicking America out of the middle east under threat of multi-nation combined nuclear attack. America will tuck its tail and leave quietly rather than watch its major cities taken out.

America's little bully proxy Israel will be given a clear message: "Cause any more trouble any fucking place at all we'll turn your fucking little piece-of-shit nation to glass and ash. You even look at Iran without a smile on your ugly Jew faces and we'll happily wipe them and you off the planet with a smile on our faces. Go ahead, try it, make our day."

But it's only temporary relief. Without middle east oil America rapidly grinds to a halt, the economy (what's left of it) collapses, the US dollar collapses losing world reserve currency status, and America collapses into anarchy.

Yes, payback's a bitch. America is fucked.

And those Anglo white race bankers will be long gone ...with most of America's wealth.

Sat, 07/30/2011 - 16:43 | Link to Comment geno-econ
geno-econ's picture

Great article! Just want to point out that it was not China's decision alone to open up to the West with a master plan. Decision was mostly result of Nixon wanting to" put it "to the Soviets after US-USSR Detente did not open up trade for multinationals in Soviet Union. Also at play was Jackson-Vanik Amendment meant to open up Jewish emmigration that roilled Soviets and Nixon could not overturn in Congress. So as it turned out ,a greater opportunity presented itself not only for multinationals in China, but an opportunity for retailers as well. The rest is history

Sat, 07/30/2011 - 16:31 | Link to Comment AldousHuxley
AldousHuxley's picture

Capital knows no boundaries. Unless you conserve capital within US borders, America will be just another 3rd world country ruled by tiny minority of elites either in military or bloodline aristocracy or slave owner businessman/banksters.

 

What good is US citizenship when it is worthless?

Sat, 07/30/2011 - 15:55 | Link to Comment adr
adr's picture

What people fail to realize is that we can produce goods in the USA and sell them for the exact retail price as the products made in China, keeping inflation low and allowing our country's middle class to be reinvigorated.

The problem is that we can not produce products in the USA and allow the big box retailers to keep the same outrageous margins. The average margin of a product sold in Walmart is 80%. A $10 retail item must be sold to Walmart for $2 or less. Imagine you are manufacturing an item and Walmart says to you that they will only pay $2. Even if your base manufacturing cost is under $2 it does not leave you with a lot of room for profit.

ASK YOURSELF, HOW IS IT FAIR THAT WALMART GETS TO MAKE $8 ON AN ITEM WITH PUTTING UP VIRTUALLY NO COST ASSOCIATED WITH SELLING THE ITEM!!!

The poor vendor makes virtually nothing. It is like this across the board. My company still makes product in the USA and it costs us $6.40 to produce a product.  Our retail is $24.99 and our retail "partners" will not pay any more than $10 wholesale cost. If we want to have the privilege of selling to them we must also agree to 5% in allowances: defective product, theft, advertising, etc. Once that is taken into account we pull in a little less than $3 per unit. Out of that $3 we need to pay all costs associated with running the business. The effin retailer makes $15 and we make less than $3. We have no choice because there is no competition to sell to. All retailers in the segment play along and each publicly traded travesty has board members that share a room.

We can produce our product in China for about $1.25 and our retailers know as much. They want our product to be $19.95 and they want to pay $5 for it. If we go to China we will make more money per unit and will have a lot less cost associated since we won't need any employees. The nice rub is that at $19.99 we will sell more product and the retailer will still retain their $15 in profit per unit sold. They claim everybody wins.

Can you see how those without ethics would sell out their employees in a heartbeat!!!

We said no to this proposal but as we said no we were told: "You know we get a lot of competitive products that land on our desks and all of them give us a better margins. Now we like your product and your brand but that only goes so far and we need to look at our bottom line and our comps. We think $19.99 is where we want to be."

We would like the product to be $19.99 as well but we think it should wholesale at $13. The retailer makes $7 and we make $7 which is still not really fair but at least it is reasonable. Problem is a publicly traded company could never drop their margin that much and keep the shareholders happy.

Sun, 07/31/2011 - 16:58 | Link to Comment TimmyM
TimmyM's picture

Sell your product on the Internet for $13. Late night infomercial, smart Internet advertising-make Walmert obsolete just like Amazon buried Borders.

Sat, 07/30/2011 - 17:07 | Link to Comment TaxSlave
TaxSlave's picture

Start looking for other outlets now.

They have already telegraphed to you what they are going to do to you in the future.

Sat, 07/30/2011 - 13:39 | Link to Comment GCT
GCT's picture

It started with Clinton, and was continued with Bush, and will most like be the death of us with Obama.  S. Korea did not even want to sign the agreement and he groveled before them.  Screw them.  Oh wait North Korea attacked a fricking island and now they want the agreement. Still he signed the agreement and told us it was good for us.  Shit I guess if you like Kimchi and rice.  The Koreans will not buy squat from us.  But wait we will ship more jobs to them.  I want to puke.

Obama should have said fuck you and pulled our troops out of their country,  and let North Korea attack and had them come groveling to us.  I dispise them.  We built their country and took it in the ass for them.  Now they hate us.  Yep free trade is good for us.  Turn the place into a parking lot and let God sort them out.  That might make some think twice about the USA.

Sat, 07/30/2011 - 15:18 | Link to Comment KeyserSoze
KeyserSoze's picture

South Korea had already industrialised well before the US invasion in the 1950's. It was Japan that brough modernisation and industrialistion at the turn of the 20th Century to Korea. It's a bit like arguing that the US made Japan post WW2, when clearly the Japanese had become a world power by the late 1800's on their own.

There is also this great myth, propagated in the West, that North and South Koreans hate each other. Nothing could be further from the truth. There is very little hatred and ironically South Koreans do not get half as scared at North Korea's agitations than does the US. The single biggest reason to carry on reifying this myth is to keep the US military bases and occupation open in East Asia and the Korean Peninsula in particular. Other than North Korea there is no reason for the US to be there, and neither would any of the other nations want the US to be there. (The populaces of S.Korea, China, Japan would vote to kick the Americans out if they had the chance, in a heart beat. US military bases are despised in the region.)

The irony of the ongoing presence of the US in Korea is that it is has emboldened and strengthened North Korea's resolve. The US pushes them against the wall, giving them very little option for manoeuver. If the US had taken a more backseat approach against the N. Koreans, it would have found the State would have naturally slowly disntegrated as the populaces anger turned inwards. Like I mentioned before there is no real emnity between N and S Koreans. The North Koreans would have take a look at the relative riches of the South and wanted a similar standard of living. Effectively you would have a slow de-militarisation and assimilation of both nations to the point where the North would no longer be able to sustain military aggression against the South. And neither would it be in their economic interests to do so. By maintaining a clear separation, economically so, the US stops this assimilation of the Korean peninsula.

And finally the mythical idea that Kim Jong Il is a madman, wanting to go to war at any opportunity is so farcical it's beggars belief. Kim doesn't so much as dare to fart without permission from his Chinese masters in Beijing. His nuclear arsenal was helped to be developed with Chinese assistance. If China ever saw North Korea as any potential threat, they'd roll their tanks into Korea, faster than you could say 'Dog Fried Rice'. This is realpolitik, that North Korea is an ally of China's. Keeping North Korea alive has been vital to the interests of the two great powers, China and the US. Though few will ever admit to saying this openly in public.

 

Sat, 07/30/2011 - 13:18 | Link to Comment Conax
Conax's picture

Now for a blue-collar take on this-

The US comitted economic suicide, all for a fast buck.

Businessmen, freed from any patriotic sympathy for their countrymen, browbeaten by stockholders for ever increasing returns, did what businessmen do. They found a way to bring home the bacon for their investors. With the assistance of lobbyists they managed to get laws in place to make it easier to take advantage of the far east's lax environmental and human rights situation.

The giant sucking sound ringing in our ears, they shipped the industrial base to China.

Stockholders, being less than 20% of the population, cleaned up.

Everyone else (in the heavy industries) got screwed. So we have the greatest divide, between rich and poor, since the era of the 'robber barons' of the 19th century.

The industrial arts are passed along, old timer to new employee. The old expert employees are greeting shoppers at wal-mart, the new employees flipping burgers. The skills are lost, the machines outdated, rusting hulks.  Don't look for a booming industrial economy here, ever again. Kids today wouldn't work hard like that for twice what we made. The skills are lost anyway.

Now China, all over-extended and hoping for an ever increasing share of an ever expanding market, are in a fix. The market ain't expanding fast enough. Unemployment bennies don't allow for wild shopping sprees, now that the credit cards are maxed out.

WW III anyone?  I hope the mansion and the vacation home were worth it. And even winning won't fix it. We're still well and truly fucked. (sorry, but we are)

Hell's comin to breakfast, c'est la vie.

Sat, 07/30/2011 - 12:51 | Link to Comment GCT
GCT's picture

Beatus I am talking about most of the counteries there and not just China.  Outlookin bingo you in the prize it is all about greed and our government and legal system that has sent business oversea.  Guess what we are all to blame. We basically allowed this to happen.  We voted the same jerks into office year after year all the while being told free trade is good for us.  Those who disagreed, mostly economists, were treated just like both parties are treating the Tea Party.  All of this is their fault and it is a crock.  Seems the repubs passed their bill without them after all.

If China in particular had not sweeteened the deal we would not be there. If our Politicians had not signed the agreements we would not be there.  The question now is how to get them back.

This country still has more output then any country in the world.  I am proud of America.  You can blame business all you like.   I blame the government and our legal system. 

Most whackos want us to ride fricking horses again.  LOL there is a historical site that has some documents about the problems with 250,00 horses in New York!  Urine and feces sucks!

Sat, 07/30/2011 - 12:41 | Link to Comment bbq on whitehou...
bbq on whitehouse lawn's picture

If you are weak, act strong; if you are strong, act weak.

China is acting strong because they are weak. The US is acting weak when they are strong.

The US is so big and powerful that it can be its own world economy.

Nothing exists in the world that cant be produced in the US. Dont you see that. That leaves the rest of the world to fight with each other over geographic assets, all of which are present in the US.

Without debt or private coupons as money the US would crush the rest of the world overnight.

The trick is to weaken not kill. Trying to kill the US will just piss it off on a Stalin or pal pot or mao isk scale. What would a Hitlar or Stalin do with a US at their command?

The Teaparty should be a big flashing warning sign to the rest of the world to back off or be distroyed. If these power dynasties wish to continue to exist then i would suggest that they play nice.

Sat, 07/30/2011 - 16:15 | Link to Comment AldousHuxley
AldousHuxley's picture

US is still big and powerful with her military.

In the end, military force overpowers everything including commerce, education, innovation , culture. We are still primates. The forceful winner can override losers.

Thus, China is using industrial base to build up her military. Even soviets don't sell military tech to China anymore since China reverse engineers and make copies while cancelling orders half way through the contract.

China is happy to copy her way to become #3 behind EU and US. But Chinese are Asians after all and care for each other through generations unlike "individualistic" westerners who would undercut each other at the cost of the collective.

 

Chinese short term 20yr goal: become #3 behind EU and US

Chinese long term 100yr goal: become #1

 

Japanese tried the same, but US maintained dominance after Japanese housing crash and WWII losses...

Only time will tell if China won't make the same mistakes Japanese made by learning from their failures. If they succeed then US will become another "old world" where rich Chinese visit for tourism. There will be a war with US vs. China.

 

Sat, 07/30/2011 - 11:22 | Link to Comment OutLookingIn
OutLookingIn's picture

China this - China that... What a load of crap! This article gives China much, much too much credit for this ultimate outcome. It was corporate greed - pure and simple.

Nothing. I mean absolutely NOTHING mattered except the bottom line. The multi-national corporations along with their lap dog politicians made sure that the bottom line was satisfied.

All China did was to facilitate and aid this glutoniss feeding frenzy for profit by the Western business model.

China did not steal America's lunch and eat it. American's gave them their lunch and forced them to eat it! Big difference. Now that the shoe is on the other foot, we cry foul? Give me a break!

Blame? No one to blame but our over -fed, spoiled, fat-assed selves!

Sat, 07/30/2011 - 11:13 | Link to Comment beatus12
beatus12's picture

Chinas gdp 11 trillion no way...

4 T at most. You think China

had a day alone in this? Try

Korea, Malaysia, Signapore,

Indonesia, Vietnam, Cambodia

Bangledash and so many more.

Next India - Two Chinas

easily and the middle east

rising rapidly in sinc. Many

parts of the world are rising.

Sat, 07/30/2011 - 09:11 | Link to Comment epwpixieq-1
epwpixieq-1's picture

"America’s most valuable assets were intellectual capital that resulted from 200 years of publicly funded primary and publicly subsidized secondary education " - wrong.

After the WWII America's primary assets were the thousands excellently educated physicists and engineers who have fled Europe after the devastation of the continent and the reserve world currency status of the dollar. Without them the golden period for the U.S of A. after the WWII would have never materialized.

Sat, 07/30/2011 - 10:40 | Link to Comment TaxSlave
TaxSlave's picture

America's most valuable asset was the freedom to keep what you earn.

The people, the culture, the natural resources, the water, the air .... all just about the same everywhere.

The root of all evil is the desire for the unearned.  The implementation of that evil into force is materialized by those who feed and reinforce that desire in the mentally lazy.  Once carried into law, dead people are the main product. 

Public education was the beginning of the destruction of our civilization.  It is funded on the Communist model.  What else would anyone expect?

Sat, 07/30/2011 - 16:26 | Link to Comment AldousHuxley
AldousHuxley's picture

freedom is not free.

 

You have to defend what you earn otherwise unearned will steal it. Americans are brainwashed into thinking that somehow just because law provides freedom, that freedom is given away. You have to educate yourself and your children to be responsible public citizens and hold elites accountable.

 

No protest, no freedom.

Sat, 07/30/2011 - 16:59 | Link to Comment TaxSlave
TaxSlave's picture

+1

Americans are brainwashed into thinking that somehow just because law provides freedom

Slight adjustment to that, if I may ...

Americans are brainwashed into thinking that somehow law provides freedom

The first step in getting the drones to think rights are privileges granted by their masters.  You know, in the schools where they are taught to stand in line for everything, ask permission from their government handler to go to the bathroom, ostracized for any small physical or personality difference, and all that other good training.

Oh, and taught that any personal insult you can throw at someone invalidates the truth of their position.  Gotta love it when someone makes that psychological confession.

Sat, 07/30/2011 - 09:10 | Link to Comment Moe Howard
Moe Howard's picture

Title is incorrect. How the Ruling Elite handed America's lunch to the Chinese Gangsters in Charge.

Sat, 07/30/2011 - 09:09 | Link to Comment Franken_Stein
Franken_Stein's picture

 

Wo xiang tian ni de yindao. Hao ma ?

 

LOL !

Sat, 07/30/2011 - 09:04 | Link to Comment Franken_Stein
Franken_Stein's picture

 

Where in your musings do the Rothschild family and the Rockefeller family come into play ?

You know, the Rothschilds throughout history happen to finance both sides of major military or economic wars, making sure that both the victor and the loser pay back their debt in full with interest.

 

Sat, 07/30/2011 - 09:08 | Link to Comment Franken_Stein
Franken_Stein's picture

 

The Rothschild-Rockefeller axis of evil is the backbone of what we call Anglo-America today.

 

Sat, 07/30/2011 - 10:57 | Link to Comment JW n FL
JW n FL's picture

When / If "We the People" ever get a clue.. After dismantiling the Federal Reserve Bank.. it would be prudent to remove the threat that is "House of RockaChild".

Sat, 07/30/2011 - 08:08 | Link to Comment GCT
GCT's picture

Actually alot of what is stated in this article the US military knew all about.  Actually it was required reading for some of us.  Two Chinese colonels laid out the plan as they felt China could not beat us militarily.  The two colonels thought China could beat us thru business.  I wish I could find the book.  I read it back in the early eighties.  The book outlines the plan and steps to suck the jobs out of other countries. The basic assumption of the book was China had a problem keeping their populice employed.   War was not the solution. 

As I look at all of the intellectual property we have shipped to China and the Far East I am appalled.  I spent 7 years in the Far East and my first trip in the 70's these folks in most countries except Japan did not even have TV and if they had TV it was Black and White and most lived in thatched roof mud floor housing.  My last trip was in 1989 and I was floored.  As I look back this article hits home as alot of what is stated here is actually how they accomplished it.  Laugh all you like.  But then go out and try to buy an all American made item starting at the raw material stage to the end product and you will not find many.  Greed got us here and the only way to turn it around is to become business friendly and stop shipping all of our intellectual property overseas.

Pretty soon Intel and AMD may have some competition as they are educating their people to design CPU's and are almost there to compete and exceed in this area as well. They are building fab facilities and do not have to worry about all the environmetal whackos trying to stop them.  When is the last time we built one? I am against pollution but we simply have too many fingers in the pie trying to stop business from doing anything.  We have government regulators stopping businesses from moving in our own country.  Take a look at Boeing.  Then we wonder why they move out of the USA. 

One thing in the book not mentioned here is the Chinese wanted to fund fringe organizations to impair business practices in this country.  The kyoto thing was not in the book.

By the way well said tax slave.

Sat, 07/30/2011 - 10:33 | Link to Comment TaxSlave
TaxSlave's picture

Thanks!

It appears the Chinese didn't have to fund any fringe groups.  Our own universities are doing a fine job all by themselves, churning out one socialist/fascist after another.

China loosens the noose a little bit and allows people some room to keep a little of what they earn, and the resulting economic boom makes all the statists here piss their pants about how great central planning and statism are.  If it was so great, why didn't the industrial revolution happen there under Mao?

I'd be willing to bet the book you are referring to outlines pretty much the same plans the Fabian socialists laid out.  Basically, destroy capitalism from within by shooting little darts of statism, bit by bit, until it collapses.  It starts with the impulse "There oughta be a law", feeding off peoples' avarice and desire to control others.  As it gains momentum, the system begins to reward the politics of pull and eventually destroys freedom.  The economic collapse inevitably follows.  This is the reward we are reaping today.

And out of chaos, order.  We will get our own Mao out of this, if these statists get their way.  Little do they know what happens to useful idiots like them once the thugs get into power.  They are the first ones to get shot.

“When you see that trading is done, not by consent, but by compulsion—when you see that in order to produce, you need to obtain permission from men who produce nothing—when you see money flowing to those who deal, not in goods, but in favors—when you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed.” – Ayn Rand

 

Sat, 07/30/2011 - 14:51 | Link to Comment WallStreetClass...
WallStreetClassAction.com's picture

I am glad you are quoting Alisa Zinovyevna Resembaum, an amphetamin addicted wellfare queen.

Sat, 07/30/2011 - 17:03 | Link to Comment TaxSlave
TaxSlave's picture

I am glad you are quoting Alisa Zinovyevna Resembaum, an amphetamin addicted wellfare queen.

OK, I'll accept your premise for the sake of argument and answer in kind.

And why should anyone listen to someone with such a puny little dick like you, trying to take out your penis envy rage on the rest of the world?

Now there's an argument you can understand.  You know, since you didn't answer any of the points raised.

 

Sat, 07/30/2011 - 21:22 | Link to Comment WallStreetClass...
WallStreetClassAction.com's picture

I am not looking for an answer in kind, I was hoping there was a tiny grain of critical thinking in all of this. But you have obviously already measured my dick, which is by the way 7.5 inches (fully extended). I don't know if this is considered "puny" or not, but I believe I got the idea of your brain size too. Move on.

Sat, 07/30/2011 - 16:20 | Link to Comment anony
anony's picture

Her personal problems don't negate her truth. 

Marx, Lenin, Friedman, Greenspan, theBernank-----they all have fundamental idiocies, weaknesses, and outright lies to tell, but they also have truth they have told.

Rand is still absolutely correct in many things she has written.

Sat, 07/30/2011 - 21:21 | Link to Comment WallStreetClass...
WallStreetClassAction.com's picture

"When I disagree with a rational man, I let reality be our final arbiter; if I am right, he will learn; if I am wrong, I will; one of us will win, but both will profit."  -- methamphetamin addicted wellfare queen

So, she OBVIOUSLY never profited, considering she died alone, broke, sucking "govimint tit", living in a rundown motel room. But did she LEARN? ha ha ha girls or bitchez or whatever you clowns call each other here, I must say the IQ level here is pretty dissapointing.

Sun, 07/31/2011 - 01:29 | Link to Comment Prometheus418
Prometheus418's picture

So did Tesla.  Edison fucked him up one side, and down the other- having access to truth does not make a person invulnerable to elitist criminals.

What was your point?

Sat, 07/30/2011 - 11:39 | Link to Comment PD Quig
PD Quig's picture

Unfortunately for China, their plan has worked so well that now they are totally dependent upon a customer/world that no longer has the wherewithal to consume all the shit that their factories produce at a rate sufficient to keep the lid on their population's exploding expectations. China now has far too much factory capacity, far too many laborers who are pressing for ever higher wages precisely at a time when the rest of the world is being forced to dramatically curb consumption.

China's one child policy has produced a demographic nightmare for them--and the rest of the world. History has repeatedly shown that when a society has too many unmarried young men, they find a way to rebalance...by getting them killed in wars.

China's plan to conquer us economically may have worked brilliantly, but didn't they forsee that the end game still leads almost inevitably to a military confrontation with the US anyway? And while nobody 'wins' that one, China will be back making firecrackers for a few hundred years...and will no longer be worried about their population explosion.

Sat, 07/30/2011 - 07:37 | Link to Comment Youri Carma
Youri Carma's picture

(to add to the conspiracy)

Yeah, that’s the reason Bruce Lee and his son were killed by the CIA . They became too popular in their perception.

One of the henchman of China is Geithner, who once studied Chinese at Peking University and speaks Mandarin (true story). The Chinese were ordered to laugh at him when he was in China so that his carefully planned cover wouldn’t be blown.

Bernanke is in reality Ber-nan-kee, a Chinese in a clever disquise. However he did study the great depression to perfect his wicked plans and is now very succesfully executing an other even greater depression.

Sat, 07/30/2011 - 06:58 | Link to Comment Mefistofeles
Mefistofeles's picture

I would completely disagree with the author.  The problem isn't what the national governments do or not do it's the local governments.  I knew someone who told me a story about a Chinese friend of his who wanted to build buses here in California.   After speaking to the local mayor he asked him if he could the environmental approvals for his factory,the mayor answered he had to get state approval.  Then he asked about some county approvals and the mayor couldn't help him there either.  Never mind dealing OSHA or AQMD.  In

In China when a local official wants you to build something there they can secure all the nessary permissions plus no annoying lawsuits to keep your factory from being built.

Another interesting thing about China is that many of the local officials became managers and owners of state run operations that were losing money and turned them around.

Local officials here in the US have little power to issue all the permits neccesary to start a business. In addition they can't buy into a business and use their local connections to make it prosper. 

Of course one thing that people fail to cite in the US is the availibility of easy credit.   Sometimes the availability of too much credit an be a dangerous thing as well,i.e. the subprime crisis.

China's rise was planned to some degree but in many ways it's system was simply better adapted and incentivized for commerce and development than the highly regulated systems here in the United States.  In addition the American economy simply became too leveraged. 

 

Sat, 07/30/2011 - 09:31 | Link to Comment Moe Howard
Moe Howard's picture

What a shame our corruption isn't out in the open so we can compete with the Chinese on who can be more corrupt to rob the citizen. Our problem isn't a lack of corruption of local officials, our problem is we exported our pollution {thanks Larry Summers} and of course the jobs went with it. Plus we had generations of leaders of both political parties that had no problem giving China industrial and defense secrets for campaign cash. Read a little history and discover that Clinton was impeached for lying rather than impeached and tried for Treason for giving US Missile technology to China.

Sorry, our lack of local mayor's ability to "fix things" for cash isn't our root problem, although it may seem that way to a person used to doing business in a third world economy.

By the way, the GDP per capita in China is $4,382. If you think income disparity in the USA is bad, try the People's Republic of China.

GDP per capita in the USA is $47,284.

What happens in China when the people decide that they want a piece of that "Chinese Dream" and start rioting to depose their Ruling Elite? In other words, how are you going to keep the peasants in the rice paddies without any real increase in living standards? You think heath care is bad in the USA? Try the worker's paradise that is modern China.

Pollution in China's industrial cities makes the USA in the 1950's look good. Sorry, if we could depose the Ruling Elite here in the USA and stop the empire building, we wouldn't even have this conversation.

Sat, 07/30/2011 - 05:32 | Link to Comment granolageek
granolageek's picture

All you rightinst ideologues are crazy. This guy explains the problems with the Kyoto protocols, says the US didn't sign them, and then blames them for a big chunk of our problems in a not just cheap but blatanly self-contradictory shot at the left.

Then, after 1000 words or so of explaining how the MNCs looted America, shoots the messenger (that would be Bernie Sanders) for saying so and wanting to claw back the bucks.

"Dear boomers,

This is how China got the corporatists to transfer the wealth of the country you grew up in to China, in exchange for 2% off the top.

Instead of standing those clowns up against a wall and grabbing back at least that 2%, you should be grateful for the chance to spend your declining years digging coal for the wages your great grandfathers (literally) fought pitched battles to raise."

Go ZeroHedge.

Sat, 07/30/2011 - 04:49 | Link to Comment Sudden Debt
Sudden Debt's picture

Made In America anyone?

 

Sat, 07/30/2011 - 04:24 | Link to Comment williambanzai7
williambanzai7's picture

Everyone who can do so, should visit China. I am afraid it is just too big and compllex to simplify on paper. We are always fed the negative news, Much of which is an unpleasant reality. But the other news should not be brushed aside or derided as propaganda.

It is a monster and you literally have to see what they have accomplished to understand the nature of what we and indeed the rest of the world are competing with. They have a five, ten, twenty five and fifty year plan, while we can't seem to move beyond news cycles.

It is truly mind boggling.

Sat, 07/30/2011 - 13:16 | Link to Comment CitizenPete
CitizenPete's picture

Spot on.  I am back for 2 weeks in the USA to witness the circus that America has become - Rome burning would look better.  Meanwhile in china 20 yo millionares struggle to make there next mill, and yes- some still struggle to survive, but that's capitalism.   The streets of Beijing and Shanghai are awash in new Audis, Porsches, etc...  The amount of cash money changing hands openly in bank lobbies is amazing.  Litterally sacks of full of US cash exchanged as a temporary store of value for shipping, just to get around RMD export laws.  (The bank even provides a cash counter in the lobby for public use -really.)

No price controls (yet), no massive strict enforcement of safety or reulations to hamper progess -- it's the 1950's in the US.

I met more 25 y/o millionares in China in 2 weeks than I have met all my life.  I'm going back next week on a 90 day Visa -- and I am finding consulting work even though I do not speak the language.  Want to ride a wave go to China to do business.  Want to tread water in a stagnant cesspool? Then run a business in the USSA.

Right now China appears as entrepreneurial and prosperous, as Amerika is politically hamstrung and economically doomed.

 

 

Sat, 07/30/2011 - 16:30 | Link to Comment anony
anony's picture

With that kind of hyper entrepenurial drive and competitive hustle and drive by the young in China, it's no wonder the U.S. is finished.

Compared to our 20-somethings who are not even in the game. 

I don't see any possibility for the First world countries to remain in that position for very much longer, the decline to 2nd and 3rd world status in continuing apace.

The best hope for the children and their children is to do what you are doing, and the very best of good fortune to you for having the courage to move to a new and undoubtedly dangerous frontier, just like the immigrants who made it here without language skills in the last 70 years.  

 

Sat, 07/30/2011 - 10:00 | Link to Comment no2foreclosures
no2foreclosures's picture

WB007, you are so right. I was born in Shanghai, visited this megatropolis in 1986 and last year. Shanghai is Las Vegas on steroids at night and there is more capitalism and individual entrepreneurism in Shanghai than all of the U.S. I don't mean the Ponzi Schemes of Wall Street, but actual enterprise and infrastructure like the massive subway system, the bullet trains, shopping on Nanjing Road, etc. Just watch the Asian 2010 Games in Guangzhou where cities are competing with each other to out do each other. In the U.S., your Banksters and the Fedsters are trying to see how much they can rape and pillage the Walmart citizens before the sheeple will protest. http://www.youtube.com/watch?v=nmYhe835nDo&feature=youtube_gdata_player

Sat, 07/30/2011 - 10:54 | Link to Comment JW n FL
JW n FL's picture

http://www.youtube.com/watch?v=nmYhe835nDo&feature=youtube_gdata_player

While America slept..

Fantastic Show.. it hurt me watching knowing that we could have had that show here! but instead the Lobby Whores sold it to Asia for CHEAP!

Sat, 07/30/2011 - 12:51 | Link to Comment no2foreclosures
no2foreclosures's picture

There is absolutely no reason why that show couldn't be done in the U.S., but the sad fact is America (including the consent of her sleeping citizens) is more interested in killing innocent people like in Libya and Iraq than in doing productive things. She has brome the nation from he'll just as Monsanto is THE corporation from he'll.

Sat, 07/30/2011 - 09:01 | Link to Comment ian807
ian807's picture

My Dad used to work with homeless people. He said the difference between the homeless and everyone else seemed to boil down to two things. Homeless people couldn't defer gratification or think ahead.

So, in a nutshell, governments can think ahead. Businesses tend to react only to what's immediately around them.

You need to do both to flourish. China, whatever else one thinks about it, does both. The USA no longer thinks beyond the election cycle or quarterly report. 

Sat, 07/30/2011 - 17:34 | Link to Comment ping
ping's picture


'The difference between the homeless and everyone else [is] Homeless people couldn't defer gratification or think ahead.'

 

Wow. A little knowledge is a poisonous thing.

 

As the statistics show, should you care to look, most homeless people are victims of domestic violence, young adults ejected from government 'care', and families whose breadwinners lost their jobs.

 

The battered wives didn't ask to be beaten. The kids didn't ask to be sent to crappy children's homes, neglected and not educated. The families didn't ask for industries to be shipped to China.

 

But why think of them as victims when you can blame them, right? Damn undeserving poor.

 

BTW: the ones who drink or take drugs? You try sleeping on the streets and see if you can get by without needing to deaden the pain. Apparently, it's not the easiest thing.


Sat, 07/30/2011 - 10:17 | Link to Comment TaxSlave
TaxSlave's picture

So, in a nutshell, governments can think ahead. Businesses tend to react only to what's immediately around them.

Are you joking, Komrade?

Sat, 07/30/2011 - 06:43 | Link to Comment fishface
fishface's picture

you are right it's fascinating

I've been in Shanghai the first time in 97, stayed in the first 4star hotel in Pudong

and only 4 years later it's a new city, the financial district didn't excist in 97, not even a hole in the ground, new airport too...crazy stuff

But their political system is far superior, they can make 5, 10 year and even longer plans and work towards a vision.

In western democracies you can't. You can only plan for the next 3-4 years max. If you have the votes in parlament to execute those ideas. If not you can just plot along like the US is doing now, do what is absolutely neccesary and even that is difficult

 

 

 

 

 

Sun, 07/31/2011 - 01:20 | Link to Comment Prometheus418
Prometheus418's picture

Mixed communism and capitalism is superior?

That central planning that you so admire is not all you wish it were- it's only as good as the man at the top, and things can change really quickly.  I've seen things done both ways plenty of times- strong central planning V. almost entirely decentralized structures, and the decentralized are always far more adaptable, resiliant, and faster to adopt improvements to the system than the cases where a strong central leader and his lackeys are in an aerie laying out long-term plans.

It's all in the details- when every little cog has responsibility for their function, and the ability to act on that responsibility, the problems stay little and get solved on time.  When one all-seeing eye tries to keep track of it all from on-high, things get missed, and those little things snowball until the whole works comes crashing down- the only thing that keeps those systems together is a perfect leader, and those are in real short supply at any point in time.

Personally, I'd rather have a position than a ten-year plan.  I've got both, but the position keeps me in the right place and ready to fight, while the plan is just a framework that is susceptable to permanent damage at any time (2008 comes to mind in my case.)

If the strength of China is really in their central planning, I'd better go buy some US Treasuries. 

Sat, 07/30/2011 - 09:40 | Link to Comment Moe Howard
Moe Howard's picture

Hitler planned for a Thousand Year Reich. I have read some comments of observers during the 1930's in Germany. The recovery they observed after Hitler was amazing to them. Many thought Facism was superior to other forms of government, including communism, as it incorporated business leaders and elites rather than executing them as the Bolshvieks had done. Grand works were accomplished and planned. The economy boomed.

However, I would rather have no progress, no finanical district, than a "superior political system" like that in China or Nazi Germany.

Admire your Communist Rulers, fishface. I see you value freedom and liberty not at all.

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