US Financial Crisis/Bailout, China's Role

RedMercury said:

I find it amazing that intelligent people can still advocate economic systems which have failed so spectacularly before our very eyes. Not 30 or 20 years ago, but now, in slow motion, in the news every day.

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You don't understand the issue. People said back in the 1930s that the great depression proved that capitalism failed, that the free market failed. Well, you heard it from the US government itself that the failure of that era has caused by monetary officials, in particular the Fed, not doing what they were chartered to do, which is to prevent bank runs. Similar thing here. It was the government, not the private market, that mandated Fannie Mae and Freddie Mac to make mortgages available to people who wouldn't have been approved otherwise. The private market has made tremenous mistakes, that's for sure. But when you make an absolute statement like capitalism or the private markets have failed, you have to examine your own assertion in proportion here. If it has failed so much, why is it that the US still has among the highest standard of living in the world? Why aren't Americans flocking to China or Russia or Venezuela to search for opportunities? Why did the people of eastern europe risk their lives to bring down the berlin wall? If centralized economies are so great, why doesn't China or the USSR have the highest standards of the living in the world? You won't answer those questions because you are wrong. And you are wrong because you watched a couple of Obama debates and now thinks that you understand all the issues.

dlhh said:

To pla101prc:

Tell me more of the role of the media & the milk powder case. You seem to have some interesting insights into this?

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well the premier of Hebei province is Hu Chunhua. a prospective politburo standing committee member,nicknamed "Hu Jintao jr". so right there the whole thing is already tainted with power struggle because this guy only got the position in Hebei four months before the milk powder thing broke out. some news outlets were basically used by certain ppl or groups of ppl to pressure Hu Jintao into making concessions to his political opponents. and this was right after Meng Xuenong of Shanxi was abdicated his position for something that wasnt even his fault. yeah food safety is a concern but the way this incident was exposed instigated a greater scale of consternation than it "should" have. i mean the powder does not affect adults and four babies were killed. in canada here 20 were killed from listeriosis and i didnt see as much panic and anger in China. as a result the government had to step in and put an end to this fiasco. which i supported. because when the government allowed press freedom on this stuff in the beginning as a show of increased transparency, all the news media and "ppl with hidden agendas" took advantage of that. the news media because they wanted more publicity. and some others such as Hu's political opponent wanted to put more pressure on the president, and of course anti-CCP organizations had to take advantage of this incident as well to back up their claim of the CCP's "lack of competence". even the launch of the spaceship cannot escape this incident. i read this disgusting news report on bbc about the spacewalk, along with thousands of other disgusting news reports, that bascally said "well China did this spacewalk and we thing its fake" and then they went on to talk about the milk powder!! honestly how pathetic can you journalists get? not that this stuff shouldnt be exposed, but it shouldnt be manipulated the way it has been.

FugitiveVisions said:

I'm not proposing that we ought to turn local officials into feudal lords. Rather, I'm proposing that we ought to restrict the power of local officials so that they do not have a monopoly over information. It seems to me that the best way to protect the consumer is the demand of the consumers themselves for adequate product disclosure and the demand for information on product feedback. The government has been extremely inefficient and in some case downright counterproductive to promote these goals. Thus, let the market place create the institutions such as consumer advocacy groups to monitor these things. After all, if the demand for such knowledge is sufficient, it would be profitable for someone to gather and dissimilate the information to the consumer. Then we wouldn't have the problem of corrupt and inept officials trying to cover their asses.

I'm not arguing whether what I'm proposing has a historical precedent. Indeed, if you look at the course of history, there has been very few instances where the government has not exercised brutal rule over its subjects. All I am saying is that it's not the way that it ought to be and the Chinese people can achieve even greater prosperity without the government bureaucrats impending their progress at every step of the way.

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yeah again we have to be practical here. yes the CCP actually is gradually reducing the power of the local government. just look up on the content of the recent land reform. and the monitor thing is a good proposal but in practice it would do more harm than good unless you can regulate it.
and mind you that these officials might be corrupted, but they are definitely not inept. they are smart ppl with good education. i have relatives working in the government and i got a chance to meet some local officials when i was in China this summer. no doubt they are corrupted, but i cannot deny that these ppl are good at what they do. and there are a lot of problems in China nowadays that actually require a lot of government regulation. you put too much faith in an immature market economy.

pla101prc said:

yeah again we have to be practical here. yes the CCP actually is gradually reducing the power of the local government. just look up on the content of the recent land reform. and the monitor thing is a good proposal but in practice it would do more harm than good unless you can regulate it.
and mind you that these officials might be corrupted, but they are definitely not inept. they are smart ppl with good education. i have relatives working in the government and i got a chance to meet some local officials when i was in China this summer. no doubt they are corrupted, but i cannot deny that these ppl are good at what they do. and there are a lot of problems in China nowadays that actually require a lot of government regulation. you put too much faith in an immature market economy.

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I still have a hard time understanding your argument because you still have not presented any evidence whatsoever to back up your premise that to restrict the involvement of local government officials in the market economy would cause more bad than good.

How would restrictions on the ability of government officals to levy taxes on poor farmers weaken the social order and the ability of the CCP to rule?

How would the elimination of government agencies that serve no visible purpose other than delay the formation of businesses through the wait process, and often in the process, forcing the entrepreneur to pay a portion of the investment in bribery, hurt the economic order or the CCP's ability to rule?

How would the privatization of information regarding consumer products and services hurt the economy or weaken CCP's rule?

How would putting a stop to the thousands of corrupt officials fleeing the country with billions of hard-earned servings be a risk to CCP's rule?

I have said it before and I'll say it again. Reform is not the threat. The absence of reform definitely is a threat. Reform will have to entail a higher level of disengagement and non-interference of corrupt government officials in the economic activities of the country. Billions of deadweight loss in the form of bribery income, consumer risk adversion, and other inefficiencies would be saved by taking these measures. China no longer has the wherewithal to continue to feed these fat pigs.

FugitiveVisions said:

I still have a hard time understanding your argument because you still have not presented any evidence whatsoever to back up your premise that to restrict the involvement of local government officials in the market economy would cause more bad than good.

How would restrictions on the ability of government officals to levy taxes on poor farmers weaken the social order and the ability of the CCP to rule?

How would the elimination of government agencies that serve no visible purpose other than delay the formation of businesses through the wait process, and often in the process, forcing the entrepreneur to pay a portion of the investment in bribery, hurt the economic order or the CCP's ability to rule?

How would the privatization of information regarding consumer products and services hurt the economy or weaken CCP's rule?

How would putting a stop to the thousands of corrupt officials fleeing the country with billions of hard-earned servings be a risk to CCP's rule?

I have said it before and I'll say it again. Reform is not the threat. The absence of reform definitely is a threat. Reform will have to entail a higher level of disengagement and non-interference of corrupt government officials in the economic activities of the country. Billions of deadweight loss in the form of bribery income, consumer risk adversion, and other inefficiencies would be saved by taking these measures. China no longer has the wherewithal to continue to feed these fat pigs.

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there is nothing wrong with your argument its just that some of them seem to be fairly unpractical. sure if we do "this" then "this" will happen. but how do you propose we get there? everyone knows that problems exist in these areas and there are many solutions have been tabled, the problem isnt really in finding solutions but in executing them. i have heard a thousand ppl saying the exact same thing as you did but none can actually come up with concrete procedures on how to get there. its so easy to say "well we gotta do this", but hardly anyone is ever concerned with the question "how do we do it?" i think it'll be more useful if you address that aspect of the reform rather than just the reform itself

AssassinsMace said:

I think the communists learned a thing about Mao which was they never want somebody again with that type of charisma in a position of power which could lead to tremendous disaster. Which is why every Chinese leader these days is pretty boring. Which is why they also have a paranoia about religion especially cults like Falun Gong. Religion is open to charismatic individuals with power. Which is also why watching how US elections have operated gives them a bad taste too.

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I kind of agree with this assesment. There is a trend for populism, picking leaders because of their appearance, charisma, say the things people want to hear (hope, change), have the right name (Bush), plenty of financial backers and connections, and not much substance which can make people's head spin or say things that they cannot understand. Under a populist style of government, the high intelligence technocrats have little chance of being elected. There is a government right now where many members of their parliament got actors, or members of family elite with the connections.

In the CCP, everyone appears to be a boring technocrat but they got brains. Who is a world leader here that has a degree in engineering? Hu is dam and a waterworks engineer by profession.

China has a horrible bloody history with cults. See the Taiping rebellion which killed millions.

I want to see a political process that brings the smart talents to the top, not the populist idealogues. I hope its possible with a democracy.

To pla101prc:

Interesting. Thks for the insight. Things are never so easy or black & white in China and I agree that governing such a diverse country is a herculean task. CCP, whatever its faults should be commended for bringing prosperity to so many people in China.

As for the Western media especially Anglo Saxon such as CNN, BBC & others, I wouldn't care too much about what they say. I never believe in their news or downlight lies and spins.

We all know their agenda is to have economic & military supremacy which they try to spin with such speeches as FREEDOM, DEMOCRACY. They never ask whether the people in general support the Goverment. They always find a few people disgruntled with the government anf they spin this as the general trend.

NO, I never ever listen to their news, especially about China. Hopefully, as China develops and the people get more sophiscated, they see through their agenda and can develop their own spin & PR departments to counter their never ending lies and deceit.

crobato said:

I kind of agree with this assesment. There is a trend for populism, picking leaders because of their appearance, charisma, say the things people want to hear (hope, change), have the right name (Bush), plenty of financial backers and connections, and not much substance which can make people's head spin or say things that they cannot understand. Under a populist style of government, the high intelligence technocrats have little chance of being elected. There is a government right now where many members of their parliament got actors, or members of family elite with the connections.

In the CCP, everyone appears to be a boring technocrat but they got brains. Who is a world leader here that has a degree in engineering? Hu is dam and a waterworks engineer by profession.

China has a horrible bloody history with cults. See the Taiping rebellion which killed millions.

I want to see a political process that brings the smart talents to the top, not the populist idealogues. I hope its possible with a democracy.

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the advantage of having an engineering degree is that you are less likely to get entrapped in all the political theories and all that useless crap. but they are less likely to be very innovative or carry a sense of history which might lead them to make big adjustments to their predecessors. Deng took advantage of this to allow his policy to persist (which is a good thing). but if Deng himself was some engineering dude and did not have any experience in the military (which is important in shaping the charisma and personality of a leader) he would have been another Hua Guofeng. of course university education only makes up a fraction of these ppl's experiences its still more important to look at the present circumstance. you can have the greatest political aspirations but if China's economy is like half broken then you gotta drop your ego and fix the problem in front of you. no doubt that the CCP central gov is a highly competitive place and if you wanna stay in the game you better keep yourself sorted out. if you cant do the job there are many other competent individuals who can.

pla101prc said:

there is nothing wrong with your argument its just that some of them seem to be fairly unpractical. sure if we do "this" then "this" will happen. but how do you propose we get there? everyone knows that problems exist in these areas and there are many solutions have been tabled, the problem isnt really in finding solutions but in executing them. i have heard a thousand ppl saying the exact same thing as you did but none can actually come up with concrete procedures on how to get there. its so easy to say "well we gotta do this", but hardly anyone is ever concerned with the question "how do we do it?" i think it'll be more useful if you address that aspect of the reform rather than just the reform itself

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How can the solutions be more obvious?

For arbitrary taxes and fees levied by corrupt officials: strip away the power of local officials to impose their own tax code.

For corrupt during the business formation process: streamline the process and/or do away with the bureaus that control how people invest their capital in business.

For the problem of government officials holding information: eliminate the government organs or functions that regulate consumer products and let the private sector consumer advocacy groups fill in the gap. I have not heard of one case where the corrupt government regulatory agencies have saved one life by exposing one faulty product. Doing away with the whole thing seems to me would not hurt anyone one bit.

I could go on....

crobato said:

I want to see a political process that brings the smart talents to the top, not the populist idealogues. I hope its possible with a democracy.

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Here is where I fundamentally disagree. Why would you want to suffocate all the smart people in government offices when they can make a real living and do something that's actually productive to society in private enterprise? Thomas Edison was probably one of the brightest inventor/engineer in history and I sure as heck am glad he didn't try to apply his talent in government. To quote Reagan here: government is not the solution to the problem, government is the problem. You got the smartest economists on the planet in Milton Friedman saying that the government ought to stay on the sidelines. Why the heck would you ever want a bunch of bureaucrats, regardless of how they came to power, control your lives?