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Yes unlike to all of those other political systems that are perfectly happy to crash the system now when it hurts less, like..... I am sure we can come up with

by evgen 5y ago

Yes unlike to all of those other political systems that are perfectly happy to crash the system now when it hurts less, like..... I am sure we can come up with examples... any day now....

LatteLazy 5y ago
The Northern Europeans don't have the same love of bubble we do. They plan long term. The Chinese are facing the same temptations we are now. At least some of the time they make longer term choices. I won't pretend that's always the case, but at least some of the time it is (eg the current Evergrande situation). They have their own political issues so I'm definitely not saying we should just copy them. But their ability to plan more than 2 years ahead is a major advantage they have over us...
- hnfong 5y ago
  It can be argued that Evergrande being allowed to take on so much debt is actually evidence of Chinese officials not taking a long view on things. Presumably the pressure to pump up the GDP was so great in previous years (not unlike executives in capitalist America with their quarterly reports) that they allowed corporations to become what they currently are.
  - evgen 5y ago
    Exactly. Evergrande is simply the tip of the iceberg. There is a huge amount of bad debt in the Chinese banking system that has been hidden for various reasons and while the most obvious examples are starting to explode the big fear (for Chinese leadership as well as foreign markets) is that once the first dominos start to fall the entire rotten edifice might collapse. China was an extremely bad example to pull and to be honest was just the sort of example I was hoping someone would bring up as a contrast to 'anglo-style democracies' because it is so easy to tear apart.
  - LatteLazy 5y ago
    We can back and forth about whether Evergrande was well managed or well regulated. I mostly agree if that helps. But the point I was making is that when a big company goes bankrupt, at least in this case, the CCP let it happen and didn't just keep it alive on zero interest loans. That's the right decision in the long term but it's painful in the short term. That's a decision the US and UK have been unwilling to make since 2008.
    - evgen 5y ago
      No, that is not what happened. Evergrande has been kept alive by the CCP and fed zero interest loans through lax banking regulations and massive property speculation by the public. The bubble it represents should have popped in 2008 but was protected and left to fester by the Chinese government because it was politically unpopular to do so. They can no longer hide the reality of these unsustainable bad debts and so the international market is turning on it, but the CCP can't afford to prop it up either and are desperately trying to figure out a way to soften the crash. This is a long-term failure of over-building and a massive property speculation bubble that is popping; it is not an indicator of a country that is doing the right thing because it is smart in the long term, this bubble is popping because they can no longer hide the problem and the short term pain will include wiping out a large chunk of the nascent middle-class.
- missedthecue 5y ago
  Iceland was hit very hard by the great financial crisis. Their banking sector was devastated. The dutch almost completely lost ABN Amro. And of course Sweden had a major financial crisis in the mid-1990s.
  - LatteLazy 5y ago
    I'm not saying other countries don't have issues. I'm saying that the anglosphere is unusually unable to make difficult decisions. When other places have issues (financial crisis or large company bankruptcy events) they get on with them. For the last 12 years we've sat on low interest rates because no one wants the short term pain of putting them up even though that just makes it worse in the long term. Take Ireland: big sovereign debt issue after 2008. No issue today because they got on with austerity and bounced back. Iceland (I believe) also made tough decisions (allowed bankruptcies). The Dutch aren't running their whole economy around keeping ABN Amro afloat either. That's the issue here: everyone makes mistakes but do you take the hit and clean up or pretend it isn't a problem and just keep extending credit...

by evgen 5y ago

Yes unlike to all of those other political systems that are perfectly happy to crash the system now when it hurts less, like..... I am sure we can come up with examples... any day now....

LatteLazy 5y ago

The Northern Europeans don't have the same love of bubble we do. They plan long term. The Chinese are facing the same temptations we are now. At least some of the time they make longer term choices. I won't pretend that's always the case, but at least some of the time it is (eg the current Evergrande situation). They have their own political issues so I'm definitely not saying we should just copy them. But their ability to plan more than 2 years ahead is a major advantage they have over us...

hnfong 5y ago
It can be argued that Evergrande being allowed to take on so much debt is actually evidence of Chinese officials not taking a long view on things. Presumably the pressure to pump up the GDP was so great in previous years (not unlike executives in capitalist America with their quarterly reports) that they allowed corporations to become what they currently are.
- evgen 5y ago
  Exactly. Evergrande is simply the tip of the iceberg. There is a huge amount of bad debt in the Chinese banking system that has been hidden for various reasons and while the most obvious examples are starting to explode the big fear (for Chinese leadership as well as foreign markets) is that once the first dominos start to fall the entire rotten edifice might collapse. China was an extremely bad example to pull and to be honest was just the sort of example I was hoping someone would bring up as a contrast to 'anglo-style democracies' because it is so easy to tear apart.
- LatteLazy 5y ago
  We can back and forth about whether Evergrande was well managed or well regulated. I mostly agree if that helps. But the point I was making is that when a big company goes bankrupt, at least in this case, the CCP let it happen and didn't just keep it alive on zero interest loans. That's the right decision in the long term but it's painful in the short term. That's a decision the US and UK have been unwilling to make since 2008.
  - evgen 5y ago
    No, that is not what happened. Evergrande has been kept alive by the CCP and fed zero interest loans through lax banking regulations and massive property speculation by the public. The bubble it represents should have popped in 2008 but was protected and left to fester by the Chinese government because it was politically unpopular to do so. They can no longer hide the reality of these unsustainable bad debts and so the international market is turning on it, but the CCP can't afford to prop it up either and are desperately trying to figure out a way to soften the crash. This is a long-term failure of over-building and a massive property speculation bubble that is popping; it is not an indicator of a country that is doing the right thing because it is smart in the long term, this bubble is popping because they can no longer hide the problem and the short term pain will include wiping out a large chunk of the nascent middle-class.
missedthecue 5y ago
Iceland was hit very hard by the great financial crisis. Their banking sector was devastated. The dutch almost completely lost ABN Amro. And of course Sweden had a major financial crisis in the mid-1990s.
- LatteLazy 5y ago
  I'm not saying other countries don't have issues. I'm saying that the anglosphere is unusually unable to make difficult decisions. When other places have issues (financial crisis or large company bankruptcy events) they get on with them. For the last 12 years we've sat on low interest rates because no one wants the short term pain of putting them up even though that just makes it worse in the long term. Take Ireland: big sovereign debt issue after 2008. No issue today because they got on with austerity and bounced back. Iceland (I believe) also made tough decisions (allowed bankruptcies). The Dutch aren't running their whole economy around keeping ABN Amro afloat either. That's the issue here: everyone makes mistakes but do you take the hit and clean up or pretend it isn't a problem and just keep extending credit...