Tuesday, August 17, 2010

Lìzhèng and raise your hands!

 The big news to come out this past Monday morning, Beijing time, was that
China's economy skipped past Japan's in the second quarter, becoming the world's second largest. The Japanese economy is valued at about $1.28 trillion, slightly below China's figure of $1.33 trillion. The gross domestic product of the United States was roughly $3.5T for the quarter.

These numbers are subject to interpretation however, for example if you adjusted China’s currency up 40% to bring it in line with the USD it would put their GDP at about 2.5T and you knock about 20% off the US economy for the non productive financial services industry that brings the US down to 2.8 T. That still leaves the US ahead of China but not by much, consumer spending in China only accounts for 35% of their economy
 and with 70% of the US economy based on giving each other haircuts and serving fries with that, is the US still ahead?

China does have perhaps four times the population of the US so you could still say it’s comparing apples and mandarin oranges since they have some 700 million people still living in abject poverty. The poor in China have one thing the poor in the US don’t have, real hope for the future. China creates new middle class people by the millions every year, the US is creating new poor people by the millions. China is creating new millionaires everyday, the US is making billionaires richer as they create new poor people.

China is building skyscrapers at such a rate that it has half of all the tall construction cranes in the entire world and consume 40% of the all world’s steel and concrete each year. They are building major projects bigger than anything the US has ever done even before Reagan took the economy off line. It took China just three years to build a 230 mph bullet train the equivalent of the distance from New York to Chicago. Obama barely got funding through Congress to start building what he calls a high speed train running from Chicago to St. Louis (a fraction of the distance) that might reach 90 mph, a train speed not seen in the US since, (wait for it) 1950.

There are few economists anymore that don’t see China passing the US to become the dominate super power, they just can’t agree on the time required. The popular press likes the twenty year estimate but some say just ten years and others point out China will begin its twelfth five year plan next year and they will probably set goals that will put them ahead of the US. This is without taking into account how far the US will have declined by then.

For you fans of Reaganomics and the “New American Century” this is your Mandarin lesson to help you prepare for that new century: to say “stop” when in a vehicle say “tíng chē”; to someone on foot simply say “zhànzhù“; but if you hear ”lìzhèng“ that means  “halt!” as used it’s by the military, you might also want to raise your hands. www.prairie2.com


SanMigMike said...

I believe on one of the Oregonian's sites someone was explaining how "making things" was so old fashioned and unnecessary in the America of today.

I'm an old fashioned guy that thinks that real wealth comes from making things, mining things, growing things. Actually doing the adding value idea. I think ALL real wealth comes from doing such things. But con artists have done real well throughout time and they are doing fantastic right now...but for how long? The other issue might be the simple one of just how many people in this day and time does it take to play games with money, a handful and a few clerks and janitors and a few good computers? But then who will do all that consuming that has to be done to make this work? Beggars and tramps and serfs just don't consume many BMW's.

But we are told that it is actually kind of stupid to add value to things by making raw steel and then turning it into something. Real wealth comes from playing games with money, doing such things as betting on both sides of an "investment". Simple minded soul that I am I just cannot figure out you can bet on both sides of an investment, set the "investments" up and run the bank and somehow NOT make the deal turn out the way YOU want it too. And recent years have shown us just how trustworthy pretty much everyone in the "banking" and "investment" business seems to be. Makes the Mafia or even the Russian Mafia or South American drug lords look honorable.

We are still reading that there is a chance that the "recovery" might not continue when the real question should be "what real recovery?". But our government still plays games with the numbers, working hard so they can claim that things are not as bad as we can plainly see. But so many of us keep swallowing the government line, but Americans are not alone in their blindness.

All the past leading countries have had thoughts that their run in the sun was somehow a God given thing and no matter what history showed that somehow "their" time in the sun would be unlimited. I think we can see that America's run, our time in the sun is ending and the reasons why are obvious to some of us. So due to Reaganomics and the new Imperial Neo-Cons America's time in the sun will be less than or about a hundred years. Compare that to the British Empire or the Romans. We really screwed the pooch on this one! But it must be okay since the rich got richer and the middle class will pretty much disappear.

To some the reasons don't matter since if you are a boss of a multinational company you think it really doesn't matter where the suckers spend their money as long as it winds up in your pocket so...so American bucks...Chinese yuan/Remimbi...who cars as long as you get them.

But it should matter to those of use that are being taken for a ride but so far it doesn't.

Maybe that coming anger can be used by a right-wing populist demagogue (that will shortly be in bed with the same ruling capitalists)to gain power and not too unlike events in Europe not all that long ago, those capitalists might find themselves riding the tiger and being afraid of being the tiger's next meal. But the better lesson might be that in that example the very industrialists that helped fund that demagogue managed to find a conquering angel to restore their fortunes.