With Iceland close to bankruptcy and the world’s financial system going to hell, China stands somewhat apart in its relative isolation. Asia Times has an intriguing article on this:
“In the past, China has been blamed for the low-degree of internationalization of its financial industries. Now it seems we are profiting from this ‘fault’,” the commentary said.
Many Chinese economists share this view. “Our not-fully-open financial system and not-fully-convertible currency saved China from being rattled during the 1997 Asian Financial Crisis. And now again this seems to be a strong dam to protect us against the current financial tsunami,” an economics researcher with the Chinese Academy of Social Sciences (CASS) said.
“It is evident that the financial industries cannot become entirely market oriented. The semi-market, semi-government-control system may prove a better [system]. The problem in China is that the part of government control is too big and thus reforms are needed to deregulate.”
In early September, Steven N S Cheung, a Hong Kong-born Chinese-American economist living in exile in China, being wanted by the US government for alleged tax evasion, claimed that China “has formed the best system in the history of human kind”.
Hyperbole from Mr. Cheung aside, it doesn’t mean all people are happy with this setup. As the article briefly alludes, sovereign wealth fund management has made some extremely poor decisions at heavy losses to taxpayers. Some left-leaning intellectuals — the Chinese protectionists if you will — wanted those investments to go domestically, and generally do not think the firewalls are high enough, from the way China allows foreign capital and ownership control into the domestic market to the continuing holding and purchasing of US debt.
And while a bigger government role in the markets may be praised by some, domestic investors are not all that happy: the Shanghai A-shares have declined more than 60% from its bubbly peak at the beginning of the year. Even though it is still up since the beginning of 2007, and up a lot since any time before then, the speculative participation by everybody’s aunt and grandma means lots of people are now crying uncle. They see their misfortune, not entirely unreasonably, as resulting from frequent intervention by the government and inside participants, all captured in good humor in multiple parodies of the Olympics folksong Beijing Welcomes You, called “Stock Market Welcomes You”. Some choice lines:
Stock market crashes often,
Open traps await you.If you bought then don’t think to leave,
You will waste away here.Stock market welcomes you,
Dug a big hole just for you.Let’s sell our houses and
add to our positions.Stock market welcomes you,
If there is a bounce, they just dilute the shares.A market we don’t comprehend,
nor its dirty secrets.
How China’s economy as well as political system develop will be affected by the ultimate balance struck between isolation and integrating into the world on the one hand, and between government control and free market on the other.
justrecently says
I guess you refer to “isolation” in a technical sense, not in a political one? It’s true that it isn’t smart to copy a global economic “model” to perfection. A unusual lot of German jobs are still in the manufacturing sector, even though many economists kept predicting that the tertiary sector was “the future” for every developed country. Then again, if every country thought that way, this would be a global economy with very few containers. The steel industry didn’t look cool one or two decades ago either, but its order books are full again.
Economic decisions shouldn’t be based on fashion. That said, a domestic economy can create bubbles and bad loans of its own. Deciding about integration and isolation is only one of many decisions (and I sometimes get the impression that national governments like to publicly underplay the scope they still have, in order to underplay their responsibilities, too).
Otto Kerner says
I suspect that nobody understands the current crisis well enough to draw any valid conclusions from it.
TonyP4 says
Random thoughts.
* It is lucky that China is relatively isolated to the global crisis. It is just in its early stage of integrating with the rest of the financial world.
It is definitely not designed to be so. It is designed to artificially lower the value of the Yuen so China can export more products. More employment means less unrest.
* It is globalization and every one suffers. The Chinese economy will hurt to a smaller extend as they produce cheap consumer stuffs that are necessary even in a recession. In some cases like lower commodity costs and cheaper machinery, it will help China to expand its infrastructure.
* Crisis means opportunity. It is time to pick up asset/customer of foreign financial institutions at bargain prices. It is cheaper than building it from scratch. Just make sure the foreign governments do not oppose to the deal. It is no bail out but bottom fishing.
* There are some good bargains in many other companies that can help China. Buy the technology and customer base. Avoid companies that the government will not approve. I will not try to buy any US oil companies and companies that are even remotely involved in military research.
Judging from the returns of last year investment vs the average return during same periods, they did not do good. They need better financial researchers.
* China’s trillions of foreign reserve will be important to make good use of it now. Five years later, they will see how good are the investments I bet. It could be once in a generation opportunity esp. when you’ve cash to do so.
chinayouren says
Interesting post. I was wondering when we were going to speak about the economic crisis here.
@TonyP4 – yes, crisis means opportunity… for those who can survive it. China is not only selling cheap goods: a large share of the exports are actually part of the manufacturng chain of expensive western goods. Such as Iphones. The global depression will affect this activity, among others.
The chinese economic system today is widely recognized to be unsustainable. It is only reasonable to suppose that their 10% annual growth will be reversed, by the law of economic cycles. Of course, China is still in transition from “sick man” to superpower, the miracle is operating. And I too believe that China shall see her way from A to B. But rarely in economics things go in a straight line. There will be ups and downs before she gets to B, and a strong down is overdue.
China will definitely be affected by the crisis, even if its financial system is sound (which I doubt). This is because the crisis will come in many ways that are not directly financial, as it spills over to all the industries worldwide. The question is not whether the crisis will come to China, but rather how China is prepared to deal with it.
And that is exactly the scariest of all: if crisis gets here hard, it will be completely unexpected. It will find an unprepared country. Which is just what crises love.
I just come back to China from a business trip in some European countries, and the difference in mood is striking. In Europe, people have been expecting this since the summer. They have a more or less clear idea by now that economy is cyclical, and that there is little point in questioning the whole system. Mostly they bear it with resignation. But in China I can feel always the same optimism. And the psycological consequences of even a mild crisis here could be devastating.
Then of course, there are brilliant economists in Beijing who know very well what they are doing. But when the forces of the billions are unleashed, the technocrats are completely helpess.
RMBWhat says
LOL. I find this funny. Yeah, of course the system that’s keep my ARSE safe is THE BEST system.
TonyP4 says
I generalized on Chinese products. However, the majority are cheap consumer products. The auto parts will suffer for sure among other sectors. But, Africans now have more reason to buy auto from China than from the west with less money available.
Chinese does not have a system/experience to handle global crisis. They only experienced once in SE Asia financial crisis. Unemployment will rise for this year and next. See how Beijing handles this crisis and/or exploit the opportunity with the reserve this time.
The 10% growth rate is not sustainable for any country. As in my other post, they need more folks to have jobs to reduce unrest. It created many problems like QC, corruption, pollution and market dumping. How can you lose money for a long time in selling products below cost? It happens many, many times as jobs are more important than profits. Only Microsoft gave the software free. They charged to regular prices when the competitors had been crushed. But so far, not China.
Nimrod says
chinayouren and TonyP4 both bring up a good point:
“And that is exactly the scariest of all: if crisis gets here hard, it will be completely unexpected. It will find an unprepared country. Which is just what crises love.
I just come back to China from a business trip in some European countries, and the difference in mood is striking.”
“Chinese does not have a system/experience to handle global crisis. They only experienced once in SE Asia financial crisis. Unemployment will rise for this year and next. See how Beijing handles this crisis and/or exploit the opportunity with the reserve this time.”
+++++
I’m no economist and my field has nothing to do with social science, so with those caveats let me throw out my two cents. I would agree to some extent that China has less experience in dealing with a global crisis than other countries, if only because it is still integrating into the world, joined WTO not that many years ago, etc., so there will be lots of surprises. However, it is absolutely not true that China has no experience dealing with difficult crises.
In fact, I would argue that China is the country best able to deal with crises by examining its modern history — the government that people outside China thought to be the worst and that they predicted would fall every year in the last 50 years, is still here and has even gotten more popular. Now I know exactly what you’ll say, but hear me out. This is not an endorsement in any way, but let’s be honest here, China has been a country littered with crises of large scales, even just counting economic incidents in the period of Reform and Opening: 10%+ inflation more than once in two decades, dislocation of state enterprises and big unemployment/layoffs of state employees, cuts and re-employment of military personnel, banks with unresolvable “debt chains”, Asian financial crisis, etc. You don’t hear a lot of these because they haven’t brought down the system, though any of them had that potential.
So perhaps there is reason Chinese people seem optimistic. And that will be key, because expectation plays a big role in economics.
By the way, I don’t think it’s entirely accidental that China has not fully opened up. It made a choice to resist many outside advice. Some say it’s for internal political reasons, but I think it reflects the concensus politics that is forced by interest “fighting” that go on at high levels of the government — a crude kind of checks and balances. The result is the conservative nature of Chinese reforms — feeling your way across the river as Deng said. Many other countries rushed in, but China did not and therefore has time to learn from others’ mistakes. No, the “current system” is not sustainable, nor was any of “the systems” in any of the previous years of the last 30 years, but we got the current system from the previous ones, right?
Though it looks like things aren’t changing to an outsider, changes are taking place every day. Even what looks like currency protectionism is not — it’s a matter of stably easing into an exchangeability regime rather than a stubborn refusal to make changes — there is a difference! I’ll take quiet, slow, but real changes over politicians in other countries that promise lots of symbolic changes “in the first 100 days” or some such but actually carry out none of the truly critical yet politically difficult ones.
prophet says
I totally agree with my friend’s statement I received in my email this morning:
” I wish someone would hold all their feet to the fire the way O’Reilly did, though I do not really like O’Reilly.”
http://www.usnews.com/blogs/the-home-front/2008/10/03/bill-oreilly-vs-barney-frank.html
ecodelta says
Time for China to use the pile of cash and go shopping abroad. Technology, natural resources, strategic companies, real state, etc.
But the current perception of China abroad will prevent that policy to be as effective and profitable as it could otherwise be.
Call it western anti China bias…., but China’s anti-bias policies to counter it are far from being…. effective. 😉
ChinkTalk says
I admire the Americans – they have the most robust political system in the world. No other country in the world would be able to withstand the political and financial tsunami created by the present US leadership, yet the US remains a stable and strong country. The difference between the US and China is that the US has dumb leadership and very smart people and China has very smart leadership but dumb people. And that is why China cannot allow the immediate change towards democracy like the West wanted, look at Russia.
Just awaken from dire penury, the Chinese people don’t have the political maturity to maintain stability in a democratic society like we have in the West. The step by step approach is the correct approach.
Note: dumb = political savvy. Look at the Orange Revolution, Shiffon Revolution, etc, that is what happens when unsuspected people are influenced by the Western spy machine. I am not saying this is bad, but shouldn’t people be allowed to have self-determination for their own country rather than directed by a foreign country.
Raj says
In early September, Steven N S Cheung, a Hong Kong-born Chinese-American economist living in exile in China, being wanted by the US government for alleged tax evasion, claimed that China “has formed the best system in the history of human kind”…..
….. because in China people like me can avoid paying the tax I owe to the State by handing out a few red envelopes to the right people. 😀
Humour aside, there was a review of a book in the Economist which argues that in recent years China has been shelving capitalism and that’s one reason for the disparity in urban-rural incomes.
http://www.economist.com/research/articlesBySubject/interstitial.cfm?subjectid=478048&storyid=12333103
Interesting theory.
Wukailong says
@ChinkTalk: “Look at the Orange Revolution, Shiffon Revolution, etc, that is what happens when unsuspected people are influenced by the Western spy machine.”
Well, considering that one of the presidential contenders in Ukraine were poisoned by what appears to have been the Russian spy machine, I prefer the Western tactics. According to Chinese news media the orange revolution was a plot to get a Western-oriented government, but since the pro-Russian candidate obviously had to cheat his way to the throne it seems that the pro-Western government was what a majority preferred.
chinayouren says
@ChinTalk: “The difference between the US and China is that the US has dumb leadership and very smart people and China has very smart leadership but dumb people.”
Haha. Good one. I am not sure it is true though. Americans can be very dumb when they try. See for example when re-electing Bush who was responsible for leading a ridiculous illegal war, and in the process boosting international terrorism and giving Al Qaeda the best training ground that it ever dreamt of having. And most voted for Bush because they were concerned by terrorism!
Of course, right wing wolfobitches know better: it’s the geopolitics, stupid. But even so, they could have definitely done a better job of hiding the real reasons, like previous generations did. And they would have still got the oil while avoiding the side effects.
Excuse the off-topic.
TonyP4 says
@Nimrod,
We’re talking about China’s inexperience in handling GLOBAL crisis. It is only one major one, the Asian financial crisis that China did quite well. Most you mentioned are local crisis.
My theory is they provide enough jobs and hopes that most problems are solved easily. However, many problems are not resolved smoothly and they learn a lot by actual experience.
ChinkTalk says
@wukailong
you missed the last part of my thought – “I am not saying this is bad, but shouldn’t people be allowed to have self-determination for their own country rather than directed by a foreign country.”
GNZ says
the average person doesn’t get self determination – they just get a leader from 500 miles away or one from 50 miles away as much as the guy 50 miles away might argue he by definition represents them better.
saimneor says
Where should we start?
Pre 1979, average chinese do not have any private assets. So, financial disasters or not, no one cares; it is all about survival.
Post 1979, average chinese do not have access to credit; save every penny; have a government that, at times, execute a few corrupted state-owned factory heads.
However in USA, some people can virtually conduct robbery in the name of management, bring down the company, and still get away with.
China as it stands now, has much more strict regulations; the leaders who called for deregulation are quickly removed of power (Zhao).
KL says
The best thing that China can do now is to stay away from that mess. This seems impossible for the tight economic connection between China and the world, particularly the US, but the problem with China’s financial system, or crisis, is much different from what’s happening in the US. One must remember that China’s market has been going down months before the wall street crisis. That said, much of the influence from this worldwide crisis won’t have any substantial effect on China’s economy, it stays on the surface, though lots of worries caused.
What role should China play now? Speculator…People would expect a responsible China which help solve the crisis, but China’s ability is rather limited in this case, except that it owns large amount of cash, the real money. To make smart deals is more strategically important than save a foreign market that is falling apart. Don’t get involved in this mess. Be smart, buy oil, buy raw materials and buy companied with potential. Let the people who made their problem solve it, China should be active in the commodity market instead of the financial market.
Don’t fall for a reason like “Be a responsible country” unless there are real “political gains” which could ultimately turn into economic gains.
EugeneZ says
http://www.nytimes.com/2008/10/09/business/economy/09greenspan.html?bl&ex=1223784000&en=fd4a1a97b25b8c75&ei=5087
I have been saying for quite a while that Alan Greenspan is the No.1 on the list of people who should be held responsible for the current financial (and economic) mess. It is very dangerous when people suspend their own judgment simply because they believe someone, anyone, (in this case Greenspan) is smarter, and knows more than them. Smart and dangerous go together.
He now blames on Wall Street’s greedy people as what went wrong, instead of deregulation. This is absurd. To me, greedy people are normal people. Can you blame people for just being normal?
GNZ says
“Don’t fall for a reason like “Be a responsible country” unless there are real “political gains” which could ultimately turn into economic gains.”
that is good advice for almost every country and every individual. the problem is if every country realizes it is best not to be responsible, or that there are huge strategic advantages in not being the one left propping up the system.
I think the US has very serious problems that will keep coming back to bite it until it is forced to change – it is possible that the USA would be the real beneficiary if it melted down the financial system and was forced to bite some bullets.
KL says
EugeneZ,
Alan Greenspan warned them 4 years ago and now he is responsible for the crisis? It’s also ridiculous to blame Wall Street for the problem. Both candidates said that the hardworking American people should not be responsible for the problem, it is the greed of bankers that put the system in danger. They didn’t get the guts to tell the truth. The truth is that it is the people that is responsible for this, the people who ask for cheap house, who can’t wait to spend the money that they haven’t earned, and who take low interest rates for granted without realizing the potential risk. The people made a wish, and Wall Street made it real. It’s like you get Aladdin’s lamp and made a terrible wish then you blame the lamp.
People really thought that there is free lunch in the world, and now they are only complaining that the one they got is not completely free.
KL says
GNZ,
China, or the Middle East, could be responsible, if the “conditionality” is right and the return of such investment matches its risk…but the US will survive this, it’s a cough not a cancer… it’s painful but not fatal…
TonyP4 says
* US and China are both extremes. I do not want to say people/leader are stupid or smart.
I can say US is blessed with rich resources per capita. When folks are on easy street for a while, they can be nice (see how much donation to poor countries), lazy (used to be easy to get a well-paid job), permissive (being fat, having guns, a lot of drunks/teenage mothers), stupid (good welfare system), arrogant (see how Bush bullied the world). China is just the opposite. The cycle seems to be turning a little. I do not say China & its citizens are all angels.
* US survives in many market cycles. It will come back as it is still rich per capita as I said. This one will hurt more and we suffer longer. So is the rest of the world. China to a less extend but it will. The problem beside bankers’ greed lies on regulation. With good regulation, a lot of poor should not be able to buy a house to start with. A lot of applications have been falsified. The poor’s fault or the banker or the government. All to be blamed. The problem could be isolated without derivatives and banking globalization.
GNZ says
1) I think it is hardly ever such a case regarding responsibility – we are lucky states are as responsible as they are.
I also expect the world is going to face some issues in the next century that require responsibility.
2) I think the US has a cough because it has cancer. One of the big issues is that the US spends too much on things it does not need and creates too little. The “cough medicine” of government backed liquidity and rescues for mortgages that will deal with this wont do much to address that and other cancers – in fact it will probably just make it worse.
RMBWhat says
KL,
Dude, and who is supposed to figure out (duh, I mean these people got a bunch really really advanced degrees. I’m looking at you quants with you buggy models.. yeah right. They did that on purpose) what is what and who is who and keep people in check? You know, that thing called DOING YOUR FUCKING JOB? But in reality what happened? They got GREEDY and got into the stupid sub-prime loan crap… While freaking the people CEO who are RESPONSIBLE FOR THIS SHIT gets billions of bonuses. LOL. And you LAUGH AT ME for thinking that it’s all a fucking scam.
Give me a break. All this is BY DESIGN. It’s not about some poor people getting loans for crap they can’t afford. THat’s the appearance that they want to project and blame. But in reality we need to look past that at the puppet masters. Look at what THEY are getting out this… Basically more control. De-facto corporatist fascism.
I know if you work in the industry, it’s hard for you to see it man. But realize we’re all in this together. We’re all being screwed with no vaseline.
Nimrod says
GNZ wrote:
2) I think the US has a cough because it has cancer. One of the big issues is that the US spends too much on things it does not need and creates too little. The “cough medicine” of government backed liquidity and rescues for mortgages that will deal with this wont do much to address that and other cancers – in fact it will probably just make it worse.
+++++
I wish it weren’t true, but the more I look at it, the more it seems that on a global scale, Americans are overpaid and the emerging economies are underpaid. It’s funny when I hear people say China (or India) cannot keep growing at 10% every year, whereas I look at the per capita numbers and think, wow, they can keep at it for probably another 20 or 30 years, while it is really the Western developed world that has little room to grow further.
EugeneZ says
It is also interesting to think for a moment who has been benefiting from the subprime lending spree. I personally met many older people in the Santa Clara Silicon Valley area who literally made over a million USD when they sold their houses in Palo Alto, Saratoga, and Cupertino. They bought the houses with less than $50K decades ago, and sold it for over $1M even $1.2M the past 3-4 years. Many of them did not participate in the high-tech boom, did not hold high-paying jobs, over spent for years, and did not have enough savings or other investment for a comfortable retirement. Now, after selling their residence at a hefty profit, they can now move to Florida and live their golden years with dignity and comfort.
For those of us who bought houses from the retirees, we can take some comfort in knowing that we are financing the previous generation’s retirement. Or we can get angry that some people out there designed a scheme to force us pay for the previous generation’s overspending / undersaving.
In Chinese society, children do need to pay for older generation’s retirement, at least traditionally. In America, it is playing out the same way – just that I am not paying for my own parents’ retirements, but someone else’s.
prophet says
Here’s a song I wrote this morning:
Have you heard of the fools mountain-?
There’re some bleeding-hearts at the fury fountain.
We’re hewing a path with out directions.
Others pretend nothing’s happened
I guess we’d better think twice,
Miss-the-chance, don’t ask me why.
It’s a zero sum game of Divide & conquer
Subterfuges, excuse these motherfarkers
The thrills and chills,
The feuds on the hills
Dark clouds are gathering
Forget the silver-lining
So, turn down the heat baby,
Cause things gonna get crazy,
The men in black.
They’re gonna be back.
guitar Solo
Monologue:
las actas finales humanas
这就是人类最终的行为
These are the final acts of man
Ce sont les actes finale
Yeah, las actas finales humanas
The apes are stealing your bananas
Dream passes into reality,
Moving us fast into fantasy
这些就是人类最终的行为..
Dark clouds are spreading-no silverlining
So, these are the final acts of man.
These men of wealth and strength
Ce sont les actes finale
Those who’ve made their homes
In the mountain caves while we parish
Cause Neo cavemen just wouldn’t share
KL says
RMBWhat，
Sorry man, I am not working in the industry…but you reflection clearly answers why the candidates need to lie. Of course such economic system, policy and mechanism is BY DESIGN. When the Great Depression happened, Keynes designed almost the whole system to stimulate the economy and demand and lessen the unemployment, decades after that, the economy was paying for his policy by high inflation. Since then, monetarism and neo-classicism have thrived and monetary policy been widely used to stabilize economic growth, with the modern financial system developing under such background. But the system failed now, because what’s happening is not what the current system and policy DESIGNED to solve.
Lessons of history are never learned. Now you don’t want to admit that you are part of the reason for this mess, that get the guts to admit that it’s the system, which was designed decades ago, which helped people went through the high inflation period and ensured long economic booming.
You know what’s your tragedy? It’s that you are not of the generation that benefited from this system, but one that pay for the price.
Oh, FYI, many quants are now making more money than they ever can because their clients need them more than ever…
KL says
@prophet,
Nice song, better if you perform for us:-)
KL says
EugeneZ,
The good news is that the next generation will pay for your retirement…And they will be even more angry because they have to face higher taxes and save more to compensate previous generation’s 401K plan…
But if you just begin your career, duh, imagine what you are really angry at…
Steve Rose says
For people thinking the real estate boom helped one generation’s retirement, you must realize more people near retirement who rely on 401k or other investments for retirement is doomed. They can only watch as their life’s saving vanish in the past 3 months. Now they have to work till age 75 or later, just to survive.
GNZ says
cant see why people get upset about having to work when they are old.
People are often in fairly good health at 65-80 nowadays – my parents are in fine health and worth much more to any employer now than when they were ever when they were younger.
What is sad is that some young 20-65 year olds might be barely able to survive because they need to help pay a perfectly healthy 65-80 year old to play golf all weekend. Or that we might be systematically forcing out of employment the most productive members of some workforces because they just happen to be old.
retirement was supposed to be because you were one of the tiny minority that achieved the feat of dragging your now shattered body past the amazing age of 65 – but it ain’t amazing anymore.
RMBWhat says
GNZ,
What about those that don’t have any skillz? Like you have to go and be a janitor at 70? Like wtf.
Seen any restaurant that’s hiring 70 year old waitresses?
WTF.
Not everyone at 70 can do engineering or teach, or whatever (basically desk job).
Hell, if I were 70 I would want to work, as long as it’s interesting and worthwhile. But washing dishes?
RMBWhat says
Dude, read this:
http://www.nytimes.com/2008/10/12/opinion/12dooling.html?pagewanted=1&_r=1
Like I said earlier, that it’s not all the fault of those who took out on those loans. It’s also the fault of the smarty pants with their Darth HAL 9000 softwares… They looked at the historical data but had no relevance since they were giving out many new kind of loans (to people with bad credit). Historical trend cannot be used because they do not correspond to the present.
Or something like that. I don’t really know, just parroting posts I read on slashdot.
TonyP4 says
* First there is not too many real financial genius. If there are many, they’re sipping tropical drinks somewhere in paradise. Many smart/famous investors and mutual fund managers are losing big money this time. Even if you’re the insider of any bankrupted financial institution, you are not 100% sure of the crisis. Otherwise, you just shorted (betting the stock to go down) all other similar companies instead of your own (so no insider trading), you would have made easy millions.
Those who sell the expensive California houses are just lucky. Very few are smart to take advantage of the situation. If they bought stocks with their extra cash, they could lose 40% easy. The older generation did better as the resource (California land in this case) is at the peak. They used to have a $20 job in manufacturing job. If they’re 60 year old now, they just retire and enjoy their pension. If they’re 30 year old, they’re in tough shape. We cannot control our destiny.
* US is still rich in resource per capita (farm land, energy, mineral, all the man-made infrastructure…). They will survive and learn lessons. The world will be more peaceful as no one in the right mind will send soldiers to a foreign land to die. There are too many tyrants. Bush learns it the hard way. He tried to be a great, strong president, but the reverse is true.
* I do not think most 70 year old folks will work, or you do not understand the generous welfare system of the US. Even if you never work in US, you get about $750 social security or supplement a month per person. You pay about 1/3 or 1/4 of the $750 (from my memory) for the subsidized rent. All medical delivery and prescription are free if you have less than 1,000 in your bank account. In addition, you got food stamp (enough for basic meals), delivered meal once a day, some maid service…
I paid a lot of taxes, but I do not say I support these old folks. I just want to repeat US is rich in resource per capita. It lets most of us get a decent job in the last 50 years. Globalization makes US lose a lot of manuf. jobs but gain a lot by selling products oversea like the iPhone.
However, US could tighten up. Protection is bad, but the jobs losing to Mexico without any benefit is bad… this is only one example. A lot of energy can be tapped in coastal area and Alaska if the congress let them. US is #1 in farm products… China dumping is good for US if they know how to manipulate it. I like some one sell me something below cost. The list can go on forever.
A rich man always has options. He does not have to work very hard and can make some small mistakes but China is just opposite. The resource per capita is in the extreme to the US. Chinese needs to work hard and be smart. Japan is a good example of that, but China is in just a gigantic scale.
RMBWhat says
I think what GNZ was getting on is the young one’s should not pay for the social security, pay to support the seniors playing golf all weekend living on their social security checks (I dunno, is this actually the case?)… Or that it’s going to crash anyway. I mean for SS by the time I GET TO 65, hell, I doubt there is still gonna be a SS. It’s on it’s way towards total bankruptcy at current rates.
Damnit, I got be smart about this from now on…
I need to really spend time researching this. But ti’s just boring tho man. I rather do something fun that sit down and worry about the ‘future.’ Instant-gratification is gratifying.
TonyP4 says
There will still be SS, but it is enough to buy you a cup of coffee every day.
Steve Rose says
I thought Social Security is going bankrupt in like 20 to 30 years? What happens to people who retire after 2050? What happens to people who have been using SS to survive and suddenly the payment is gone? When Clinton was president, at least he had a plan to rescue Social Security. 8 years later, now we have $10 trillion public debt instead.
TonyP4 says
Blame ourselves. The government encourages spending and no saving. If you work hard and save too much, you’re not eligible for the welfare system. The politicians want the vote of senior citizens, so no cut in SS.
Solution.
1. Hire more young foreigners like educated Chinese and Indians to do high level jobs and uneducated folks to do boring/dirty jobs that local folks will not want to work (why you want to risk your welfare entitlements).
2. Encourage smoking, liberal sex (to spread AIDS), free bergers, reckless driving, free alcohol/drugs, no exercise (thanks game makers)… more folks die early so less to get SS from the pot.
Nobody says
RMBWhat: Damnit, I got be smart about this from now on…I need to really spend time researching this.
TonyP4:First there is not too many real financial genius.* US is still rich in resource per capita (farm land, energy, mineral, all the man-made infrastructure…). They will survive and learn lessons.
Steve Rose: When Clinton was president, at least he had a plan to rescue Social Security. 8 years later, now we have $10 trillion public debt instead.
I am no USA policy pundit nor do I cheer its invasive, draconian foreign policies. I think it is time for the USA to retreat to some of its good old ways of non-interventionism, and become more self reliance. It has great natural resources, relatively small population to land mass ratio. It is the world’s leader in high tech know-hows. America may have outsourced what used to be profitable, job creating industries to developing countries. But most of those industries would not be profitable to remain in US soil with the high labor cost, anyway. It is time for USA to do what it knows is right and good, not only for itself but by everybody else.
1. DRASTICALLY Cut back on military self-annihilation spending. Bring home the boys to become farmers, factory workers, technicians, teachers, engineers etc. America can stop a lot of wars by not playing peace-keepers for its own selfish reason. (just as they, the military, assassinated JFK & Bobby K., for reducing their power, will they repeat such atrocity? Good luck, Prez. Obama)
2. From IT to ET super technology. Now is the time to finance America’s very own zero sum energy project. The exploitation of the simple physics of the steam engine empowered the west, this intra-space energy technology will do the same and more.
3. America is leading in Nano technology by decades. Let all the smart people of the world work together to find ways to save the earth, to cure the sick and to feed the hungry.
4. The less educated people of the developing world will take on what the educated people of the developed world are bored of doing. The less able people of the first world will be trained in special skills to help the developing world, while the 3rd world people can teach these foreigners old culture and collective social values.
5. Finally, America has the LARGEST prison population in the World. Something is very wrong with its current judicial system. What is the solution?
TonyP4 says
It is easy to reduce the prison population.
1. No more permissive policy. ( or 3 strikes you are out). One strike and you’re out now.
2. All murderers will be executed.
3. Send serious crime violators such as rapes to Alaska for hard labor for 3 years. I do not think they’ll commit any crime when they come back.
4. All drunk drivers will not get their license renewed for 3 months.
5. All teenage shoplifters will do social service for 1 month for each dollar of merchandise they steal.
6. Citizens cannot bear gun.
7. No welfare for teenage mothers.
8. Violent students will be sent to semi-military school.
My point is it is not hard to do. If you use human right as an argument, you’re arguing for the criminals but not for the victims.
Nobody says
TonyP4: What happened to your jokes, man? I haven’t seen one for ages.
” If you use human right as an argument, you’re arguing for the criminals but not for the victims.”
Tell me about it. I was recently a victim of a picket-pocket crime. Not only did I lose money, time , I was suspected of illegal selling of government issued documents. Man, that really made me furious. I can imagine what it is like for the victims of crime to be re- vicftimized by the so-called human-right legal system. The alternative is just as horrible. Go read Naom Chomsky’s writings. Anarchy is the one system that is closest to the mantra,” by the people and for the people.” At least everyone gets a chance. The way America is and has been, only the chosen wolves in sheep clothings ever gets to pillage and rape America and the world.
TonyP4 says
Hi Nobody,
#42 “2. Encourage smoking, liberal sex (to spread AIDS), free bergers, reckless driving, free alcohol/drugs, no exercise (thanks game makers)… more folks die early so less to get SS from the pot.”
Do you find encouraging citizens to die early in order not to bankrupt social security funny? If not, I’m just losing my humor or due to my language difficulty as English is not my native language. Hope other folks will provide better comic relief.
I always say China and US are just extremes. China will shoot some one to death for petty crimes (and get the organs for the “good” of the society. US will spend millions to unsuccessfully prosecute some one that we all think s/he committed the crime like OJ Simpson. There should be middle ground.
Nimrod says
From the bureaucratic language of the G7 meeting to this, I hear echoes of “Socialism is just good, is just good” in my head, hehe…
http://www.bloomberg.com/apps/news?pid=20601087&sid=a4N8DULfg0Sw&refer=home
“Leaving businesses and consumers without access to financing is totally unacceptable,” Paulson said in Washington. He rolled out the emergency program after a crisis of confidence in the financial system last week spurred the biggest stock sell-off since 1933. Paulson told companies getting the government funds to “deploy” the money in loans.
“The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it,” the Treasury chief said.
“The headline in the local paper that everybody’s going to read is, `Local Bank Seeks Government Assistance,”’ Fine said in an interview. “That doesn’t look real good to the folks in the local towns.”