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If you want money to be smart in your country, then providing incentive for investors to choose profitable projects is really important. Money in general is out

If you want money to be smart in your country, then providing incentive for investors to choose profitable projects is really important. Money in general is out to good use in China, but China has decided to follow the Japanese model on infrastructure projects, which leads to lots of under utilized capacity, which leads to its own opportunities for people to take advantage of but is a net drain on society (you can see that all over Tokyo). The US has its own huge moral hazard problems, they aren’t very relevant to China’s, unless you are trying to claim America is at fault for bad investments in China? Or is this just a what aboutism?At any rate, I’m the last person to encourage China to follow the USA as a role model.

toomuchtodo 1y ago
What does smart money in the US look like? I don’t think the evidence shows that US investors allocate capital effectively, but I’m happy to be proven wrong. China is a leading high tech manufacturer proven to build at volume, what is the US getting for what is being invested? PE roll ups, car washes, healthcare monopolies, etc? (accredited investor with access to non public offerings, so I have seen a lot of prospectus for US investment offerings)
- seanmcdirmid 1y ago
  Americans have mainly eschewed smart money for index funds, so you have a few fund managers deciding where the money should go, controlling maybe about 70% of the stock market money. Our infrastructure is basically at a standstill still where we throw lots of money at things for not very much results. Our tech investments still make lots of money and progress, but trump is trying to turn us from a high value tech economy into a lower value assembly economy, which is just way too dumb as it’s rhetoric opposite direction of what China is doing. China is very different with its own successes and problems. It’s stock market still has way too much insider trading for it to be very useful for capital allocation, infrastructure is mostly government driven with the veil of private investment who bets are always going to made whole, and a property market that basically mimics Japan of the 1980s heading into the 1990s. Private investment in manufacturing and tech is where most of its success is at.

toomuchtodo 1y ago

What does smart money in the US look like? I don’t think the evidence shows that US investors allocate capital effectively, but I’m happy to be proven wrong. China is a leading high tech manufacturer proven to build at volume, what is the US getting for what is being invested? PE roll ups, car washes, healthcare monopolies, etc? (accredited investor with access to non public offerings, so I have seen a lot of prospectus for US investment offerings)

seanmcdirmid 1y ago
Americans have mainly eschewed smart money for index funds, so you have a few fund managers deciding where the money should go, controlling maybe about 70% of the stock market money. Our infrastructure is basically at a standstill still where we throw lots of money at things for not very much results. Our tech investments still make lots of money and progress, but trump is trying to turn us from a high value tech economy into a lower value assembly economy, which is just way too dumb as it’s rhetoric opposite direction of what China is doing. China is very different with its own successes and problems. It’s stock market still has way too much insider trading for it to be very useful for capital allocation, infrastructure is mostly government driven with the veil of private investment who bets are always going to made whole, and a property market that basically mimics Japan of the 1980s heading into the 1990s. Private investment in manufacturing and tech is where most of its success is at.