Sunday, December 5, 2010

How Bad Can It Get?

It's been over a month since the US had its midterm elections. The American electorate replaced a bunch of lawmakers who were incapable of fixing the economy with different lawmakers who won't fix the economy either. When people here ask me why the US is struggling economically I tell them that in China the government controls the banks, and in America the banks control the government.
Democracy does not work well when so the electorate is apathetic, uninformed, and gullible. You end up with a substandard group of venal, cynical, and corrupt officials who are for sale to the highest bidder. High unemployment, massive home foreclosures, unaffordable heath care, endless unwinnable wars, rising poverty, crumbling infrastructure and crushing debt seem to have become an entrenched part of the American way of life. Meanwhile the mega wealthy see their fortunes increase thanks to thier enablers, all legally elected by the very people they are screwing.
There are plenty of problems here in China: poverty, pollution and overpopulation to name a few. However, nearly everyone's standard of living has improved, and most likely will continue to improve. And in contrast to the US, most Chinese are optimistic about the future.
Columnist Tom Friedman is a pretty big China cheerleader. He often paints a rosier picture of China than what is actually happening, but he recently wrote a pretty spot on piece in the November 30 New York Times.
The recurring theme he keeps going back to in his columns is how the Chinese are doing the things that our country could be doing. Here are a few:
1. They are not embroiled in 2 unwinnable wars, and they spend a fraction of what we do on the military.
2. They control the banking system. When real estate prices have risen too quickly due to speculation, they have required banks to loan only on primary residences. This along with other lending restrictions has done a lot to cool the real estate market and prevent a dangerous bubble.
3. The government has been making a massive investment in infrastructure.
4. The government is investing in green technology, both in research and manufacturing.
5. The government taxes enough to pay its way.
Sadly, the US government seems to think that high unemployment is a problem that they will not be able to fix any time in the near future, the near future being a relative number anywhere between 5 to 50 years.

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