5 ms·
After pointing out that "The central bankers throughout the world have lost touch with reality" and discussing the messes that have been created in large part b
by TheSkeptic 15y ago
After pointing out that "The central bankers throughout the world have lost touch with reality" and discussing the messes that have been created in large part by inept bureaucrats, The Smartest Man in Europe dismisses all of the problems brewing in China with a naive "the authorities will figure out solutions to solve them."
Anyone who truly believes that the "authorities" in China are any more capable than the "authorities" outside of China isn't very smart at all.
- trb 15y agoMaybe not capable, but surely more focused? As far as I know there are no elections that change the top leadership every few years. This way they have a larger interest in planning beyond their political term and the private industry has less influence through campaign contributions. But I might be wrong, I'm way out of my comfort zone here.
- TheSkeptic 15y agoIn China, "private industry" doesn't truly exist in many industries. To do business, you need to be politically connected to some degree. In other words, campaign contributions are unnecessary; the state and private industry are already married.
- wisty 15y agoThey aren't more capable, but at least they are able to take responsibility. Banks will be nationalized the minute they look shaky. Local governments will be recapitalized, and the leaders might get punished. But there won't be as bad a crisis, because someone will foot the bill. OK, it will cause a moral hazard. There will be a big need to reform. But there already is a big need to reform. And I think there's already a commitment (from the top, and from the general public) for reforms. Plus, it's easier to grow when you are under 1/5th the GDP per capita.
- roel_v 15y agoWhat are you talking about? Banks already are 'nationalized' for all intents and purposes (rather, they've always been under central leadership). And that's exactly the core problem with the debts owned by Chinese banks comes from.
- TheSkeptic 15y agoBingo. It's truly amazing that after all the world has seen in the past several years, many fail to recognize a house of cards when they see one.
- azza-bazoo 15y agoAgreed. These are the same Chinese authorities that refuse to publish key economic statistics, or blatantly make them up. They also have trouble keeping track of government debt -- just this week there were reports about regional government loans that have been kept hidden. And then there's the housing bubble developing in the major cities because it's been so easy to get private loans the last two years. Chinese officials can do many things, but they aren't magicians, and won't be fixing anything overnight.
- stretchwithme 15y agoSeems like what they say about China echos what they used to say about Japan 20-25 years ago. And Japan kept on rising happily forever after.
- azza-bazoo 15y agoUm, no. Japan's economy has been stagnant for close to twenty years now. China's economy has plenty of growth left in it. Although you're right that much of the scared-of-China crowd are just people who've transplanted their fears away from Japan.
- stretchwithme 15y agoYeah, you need to get a little better at detecting sarcasm.
- TheSkeptic 15y agoI think you missed the poster's obvious sarcasm. As for "China's economy has plenty of growth left in it": the issue is not the amount of growth, but the source and quality of the growth.
- azza-bazoo 15y agoSure, 'twas obvious sarcasm, my bad. But there are good reasons for China's economy to grow sustainably for some time yet (emerging middle class, manufacturing going more high-tech, etc). They have major structural problems too, but it's not all doom-and-gloom like Japan is/was.
- CamperBob 15y agoAnyone who truly believes that the "authorities" in China are any more capable than the "authorities" outside of China isn't very smart at all. A representative sample of China's Politburo: Hu Jintao, 62, president of the People's Republic of China, graduate of Tsinghua University, Beijing, department of water conservancy engineering. Huang Ju, 66, graduate of Tsinghua University, department of electrical engineering. Jia Qinglin, 65, graduate of Hebei Engineering College, department of electric power. Li Changchun, 61, graduate of Harbin Institute of Technology, department of electric machinery. Luo Gan, 69, graduate of Freiberg University of Mining and Technology, Germany. Wen Jiabao, 62, premier of State Council, graduate of Beijing Institute of Geology, department of geology and minerals. Wu Bangguo, 63, graduate of Tsinghua University, department of radio engineering. Wu Guanzheng, 66, graduate of Tsinghua University, power department. Zeng Qinghong, 65, graduate of Beijing Institute of Technology, automatic control department. ------------- A representative sample of the US Senate: ... 100 people who are pretty much all lawyers Not saying this implies anything, but my money's on the government run by engineers.
- econgeeker 15y agoChina's errors seem to be ones of engineering: Overbuilding. America's errors seem to be ones of lacking fortitude: constantly increasing over spending. If neither change, china is headed for continued growth and maybe some painful re-allocations of capital, while the US is headed off of a cliff.
- TheSkeptic 15y agoThe problem is not the former professions of the bureaucrats, but rather the fact that individuals can write the words "my money's on the government" truly believing them.
- kahawe 15y ago> Anyone who truly believes that the "authorities" in China are any more capable than the "authorities" outside of China isn't very smart at all. For the last 50-60 years, they have proven very capable of keeping 1.3 billion people under a communist regime that arguably lacks most of our understanding of constitutional legality, considering how they came into power through the "War of Liberation" and considering the lack of human rights.
- TheSkeptic 15y agoThe challenge for the Chinese leadership is not how to keep the Chinese people under a Communist regime, but how to keep them well fed (literally and figuratively). The game of politics is far more forgiving than the laws of economics.