US Financial Crisis/Bailout, China's Role

FugitiveVisions said:

telecommunications? again, this is not rocket science.

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Telecommunication what? Again, you are not answering the question: how will you find out who did what when bad people hide the bad things that they did?

FugitiveVisions said:

No, it is you who lack the basic understanding of how a free market works. You automatically assume that those who produce shoddy products or in this case, shoddy services can somehow hide it from the people. Well guess what, unless the government interferes, which it has in every single case of product failures, the market recognizes the problem fairly quickly. It was only when the government, which had interests that conflicted with the interests of the consumers whom they were supposed to protect, lied and covered up for the guilty companies were the consumers not able to recognize the problem with the tainted milk. People aren't stupid. Especially in this age of telecommunication, word spread fast. It doesn't take a rocket scientist to see that the market is self correcting when you see that the most successful corporations in every business tend to be the ones producing the highest quality products at the lowest costs. Empirical evidence simply does not support your assertions.

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Again, this is the same mistake as you have made before: assuming that a magical hand of the system automatically fixes things. It doesn't, and empirical evidence such as the current financial woes in the west support this assertion.

Business go through the path of least resistance, and if they can dump problematic products onto consumers, the will. Tainted milk occurs because business came up with a way to defeat proteins standards, showing how regulations alone don't work.

FugitiveVisions said:

Makes no sense.

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Trusting someone who is not trustworthy is worst than not trusting an untrustworthy person. It makes perfect sense. Are you sure it is not you who have comprehension problems?

FugitiveVisions said:

right, because as we all know, the reason that the government hasn't uncovered any shoddy products is that none exists in China. No shoddy products at all whatsoever.

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Oh wow, start taking quotes out of context already? I was expecting to see another ten replies before this happens. :roll:

Let me spell it out for you again. If regulations can be enforced, then there shouldn't be problems. If there is no problems, then nothing can be exposed. If regulations can't be enforced, then there is a problem.

FugitiveVisions said:

I'm not droning on more regulations. Quite the opposite. I'm for codifying the removal of certain powers and authority of the government, which is backed by an independent judiciary. It is you who keeps harping on a self-regulating government like some kid demanding to see a real unicorn at the zoo. Uh, it doesn't exist.

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We have been over this already in the previous page. Local officals have enough guts to defy the power that can sack them. I'm all for reining in local officals, but removing more power would only make things worst.

How about not making things worst before trying to make things better?

FugitiveVisions said:

Oh sure, there ought to be zero moral challenges to government authorities whatsoever. If Mao wants you to go work in the fields for free for the rest of your life, and if you disobey him, you are automatically a lawbreaker in the same league as a petty thief. Bow to the chairman.

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Moral can only be applied to those who have moral.

pla101prc said:

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...

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I have no doubt that there are power struggles, but are you sure you haven't been reading Falun Gong's papers? They have dozens of aliases for their papers and each carries stories just like this. :roll:

Does anybody else find it funny that check and balance is "check and balance" in the west, but becomes "power struggle" once it applies to China?

FugitiveVisions said:

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?

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Why? Friedman thinks that government is an entity separate from the economic cycle.

Its not. Government itself is an economic entity. Like any business, government runs best when its best managed. That's all there is to it. Government for example is responsible for creating and maintaining the social environment where the business must thrive in. It must create and maintain infrastructure, provide basic welfare and education, provide for defense, security, protection against crime, provide justice and rule of law. All that requires money, and money must be efficiently spent.

However, the problem of business and free enterprise is that its goal for measured success, which is profits, will run contrary to the public welfare. It has been proven, like the American swill milk crisis---a remarkable precedent to the Chinese melamine crisis---that markets themselves do not self regulate on quality. The swill milk crisis lasted for an unpredecented 40 years before finally dealt with the Food and Drugs Act of 1906. For a similar reason why government has to mandate safety and economy regulations on automobiles, civil aircraft, trucks, etc,. It sounds good on paper, but in reality, free markets do not self regulate themselves on safety, economy, to even things like basic sanitation in restaurants.

Engineer said:

Telecommunication what? Again, you are not answering the question: how will you find out who did what when bad people hide the bad things that they did?

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It's called reporting a crime. Wow. [head smashing the wall]

Again, this is the same mistake as you have made before: assuming that a magical hand of the system automatically fixes things. It doesn't, and empirical evidence such as the current financial woes in the west support this assertion.

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Capitalism just failed everyone! Bow to the Chairman!

Business go through the path of least resistance, and if they can dump problematic products onto consumers, the will. Tainted milk occurs because business came up with a way to defeat proteins standards, showing how regulations alone don't work.

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exactly my point, genius. Disclosure is a big part of the equation and your magical unicorn government isn't providing that.

Trusting someone who is not trustworthy is worst than not trusting an untrustworthy person. It makes perfect sense. Are you sure it is not you who have comprehension problems?

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[smashing head against the wall]

Oh wow, start taking quotes out of context already? I was expecting to see another ten replies before this happens. :roll:

Let me spell it out for you again. If regulations can be enforced, then there shouldn't be problems. If there is no problems, then nothing can be exposed. If regulations can't be enforced, then there is a problem.

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Well the problem of non-regulation does exist. And so far your only solution is to hope that the government magically regulate itself. Where do you keep your unicorn?

Engineer said:

We have been over this already in the previous page. Local officals have enough guts to defy the power that can sack them. I'm all for reining in local officals, but removing more power would only make things worst.

How about not making things worst before trying to make things better?

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Removing power from corrupt officials just make things worse. Got it. Bow to the Chairman.

crobato said:

Why? Friedman thinks that government is an entity separate from the economic cycle.

Its not. Government itself is an economic entity. Like any business, government runs best when its best managed. That's all there is to it. Government for example is responsible for creating and maintaining the social environment where the business must thrive in. It must create and maintain infrastructure, provide basic welfare and education, provide for defense, security, protection against crime, provide justice and rule of law. All that requires money, and money must be efficiently spent.

However, the problem of business and free enterprise is that its goal for measured success, which is profits, will run contrary to the public welfare. It has been proven, like the American swill milk crisis---a remarkable precedent to the Chinese melamine crisis---that markets themselves do not self regulate on quality. The swill milk crisis lasted for an unpredecented 40 years before finally dealt with the Food and Drugs Act of 1906. For a similar reason why government has to mandate safety and economy regulations on automobiles, civil aircraft, trucks, etc,. It sounds good on paper, but in reality, free markets do not self regulate themselves on safety, economy, to even things like basic sanitation in restaurants.

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Don't get me wrong. I agree that the government ought to have a role in providing national defense, tackling crime and protecting rights, including property rights, which falls under contract law.

I don't have all the details to the American swill milk crisis, so I can't say for certain the extent to which the government may have monopolized and internalized information in that case. But what I can say is that the 1800s is a vastly different place than the world we live in today. People died cheaply from a lot of things, because the standard of living simply wasn't high. But what I can say for certain is that the investments of the equity stakeholders must have been wiped out after the eventual disclosure and that management were held accountable in the court of law. So to say that the profit motive necessarily conflicted with public interest is incorrect in the sense that products that don't serve the public interest must also not serve the profit motive of the owners.

The Chinese case is a lot more blatant. In a world of telecommunications and internet, corrupt gov't officials chose to harm the consumers by delaying disclosure. Kinda like what happened with SARS, doesn't it? Again, I have more trust in the government messing up in China in these areas than I have of them doing the right thing. So far, you can't debate with the empirical evidence.

Engineer said:

I have no doubt that there are power struggles, but are you sure you haven't been reading Falun Gong's papers? They have dozens of aliases for their papers and each carries stories just like this. :roll:

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lol you mean epoch time? never read that crap lol. they prolly copied my idea when i posted on another forum that the milk powder incident must have involved some form of power struggle at all levels due to the way that it has been exaggerated in the media (not to say that it wasnt serious). that was before i learned that Hu Chunhua was the premier of Hebei. and when i was made aware of this fact by my mom it automatically fits in with my previous hypothesis.

Engineer said:

Does anybody else find it funny that check and balance is "check and balance" in the west, but becomes "power struggle" once it applies to China?

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its like when the americans support their country its called patriotism and when Chinese support China its called nationalism.

FugitiveVisions said:

Don't get me wrong. I agree that the government ought to have a role in providing national defense, tackling crime and protecting rights, including property rights, which falls under contract law.

I don't have all the details to the American swill milk crisis, so I can't say for certain the extent to which the government may have monopolized and internalized information in that case. But what I can say is that the 1800s is a vastly different place than the world we live in today. People died cheaply from a lot of things, because the standard of living simply wasn't high. But what I can say for certain is that the investments of the equity stakeholders must have been wiped out after the eventual disclosure and that management were held accountable in the court of law. So to say that the profit motive necessarily conflicted with public interest is incorrect in the sense that products that don't serve the public interest must also not serve the profit motive of the owners.

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It does not change the fact that same underlying principles are there. If markets are self regulatory they have to be independent of underlying social factors. The swill milk crisis is far worst than the melamine crisis because it deals with milk from sick cows kept under extreme unsanitary and inhumane conditions. It continues to be brought up by the press, but companies with politicians under their pocket, have always suppressed their investigation and tough action.

The Chinese case is a lot more blatant. In a world of telecommunications and internet, corrupt gov't officials chose to harm the consumers by delaying disclosure. Kinda like what happened with SARS, doesn't it? Again, I have more trust in the government messing up in China in these areas than I have of them doing the right thing. So far, you can't debate with the empirical evidence.

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I probably say, the Chinese case is not as blatant compared to the US auto industry in the sixties with their gas guzzling, unsafe cars, deliberate quality fade and planned obsolescence. The famous saying, "They don't build them like they used to" applies with Detroit. The result was the book "Unsafe at Any Speed" that brought Ralph Nader to prominence, and made worst when the auto makers took the law on their own hands by hiring detectives to find dirt they can put on Nader. The result is the revolution that led to consumer protectionism and government mandated safety standards on cars.

And it wasn't over yet, until we got Ford Pintos bursting in flames in the seventies. As recent as this decade, we got issues with overturning Ford Explorers and tires bursting. Companies both car and tire tried to cover this up for far too long, until the accidents keep happening till they can no longer be ignored.

FugitiveVisions said:

But what I can say is that the 1800s is a vastly different place than the world we live in today.

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well human beings always tend to think that they time they live in somehow transcends beyond its past. the ppl of 1800s and 2058 would say the same thing if they hold the same same view as you do. so i urge you to be more scrupulous in making any assertions that would uphold the alleged unique qualities of our time, for the world does change, but something in the world never change, for example human greed.:china:

crobato said:

It does not change the fact that same underlying principles are there. If markets are self regulatory they have to be independent of underlying social factors. The swill milk crisis is far worst than the melamine crisis because it deals with milk from sick cows kept under extreme unsanitary and inhumane conditions. It continues to be brought up by the press, but companies with politicians under their pocket, have always suppressed their investigation and tough action.

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This is what I suspected. This case, as with so many other cases, demonstrate that without the government in the way of promoting efficiency and trying to correct the problem, the problem would not have been prolonged to such a degree. If what you say is true, then sadly this case not a case where the public was fooled, because the press had reported on possible problems. The root cause of this tragedy just as the China tragedy is the counterproductive conduct of the government that retarded the correction of the market.

I probably say, the Chinese case is not as blatant compared to the US auto industry in the sixties with their gas guzzling, unsafe cars, deliberate quality fade and planned obsolescence. The famous saying, "They don't build them like they used to" applies with Detroit. The result was the book "Unsafe at Any Speed" that brought Ralph Nader to prominence, and made worst when the auto makers took the law on their own hands by hiring detectives to find dirt they can put on Nader. The result is the revolution that led to consumer protectionism and government mandated safety standards on cars.

And it wasn't over yet, until we got Ford Pintos bursting in flames in the seventies. As recent as this decade, we got issues with overturning Ford Explorers and tires bursting. Companies both car and tire tried to cover this up for far too long, until the accidents keep happening till they can no longer be ignored.

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And it turned out through independent testing that the car Nader referred to as unsafe at any speed is actually safe. But the point is taken. I am not saying that the government ought to not punish wrong doers when a problem has been discovered. The debate is over prevention, not prosecution. To the extent that conscious consumers shun away from poorly labeled or ill-reputed products, government regulation on mandatory disclosure seems unnecessary. If the consumer really has no problem spending the extra on a product so that the government can safe test it first, then it seems to me that they would still be willing to spend that extra on gov't tested products should testing become voluntary. If consumers are not willing to spend the extra on the gov't safety guarantee, who's the government to tell them what risk they ought to take. After all, every benefit in terms of safety comes at a cost. The consumer can go to the extreme case and have a food-taster for purchased food products, which would add additional guarantee to gov't testing. But the trade-off should be strictly up to the consumer, and no one should force the consumer to pay the food taster should he decide that it's a risk he can take.