US Financial Crisis/Bailout, China's Role

crobato said:

Even when the company has made enough money to buy anti pollution equipment, they do not do so, and even when bought, they are not installed or operated.

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And I would argue that they do not is that the big government is right by their side. Same thing happened with labor in the late 1800s. Every time that a corporation was able to impose tyranny on the worker or the consumer, you would find it is the government that called in the dogs to protect the profits of the corporation. I hardly blame this on the market. Rather, I squarely blame this on the intrusive nature of the government in manipulating market conditions.

Again, I'm not advocating that we ought to not have any testing. I'm simply saying that the government ought not have a monopoly in this area. After all, the government is just an entity that offers a set of services, such as law enforcement, registering vehicles, providing schooling, managing your retirement funds, funding your doctor visits, and of course, safety testing and regulation. What I am vehemently opposed to is the idea that the government ought to have a monopoly over all of these services. Who is the government to say that they are the most efficient in conducting product testing? Who is the the government to say that they ought to have the power to force you put money in its funds, earning no returns whatsoever and possibly never recovering that money. Can you imagine getting a letter from Merrill Lynch saying that the you are going to have to put 10% of your payroll earnings into an account at Merrill? Well, that's what the government is telling you.

The government has a monopoly on secondary education. Poor people can not afford to choose to send their kids to better schools. Look at the sorry conditions of today's public schools. That is what you have when you have a government monopoly.

The government used to have a monopoly in the postal service. Well, it is so inefficient due to the lack of competition and so many people were fed up with it that it eventually gave way to private enterprise.

Look, I'm not saying the government can't perform those functions. All I am saying that it is wrong for the government to say that no one else is allowed to compete for on the basis of quality and cost. Similarly, if the Chinese government is criminally guilty, then it seems to me that the right thing to do is to pass the torch on to private enterprises.

FugitiveVisions said:

And I would argue that they do not is that the big government is right by their side. Same thing happened with labor in the late 1800s. Every time that a corporation was able to impose tyranny on the worker or the consumer, you would find it is the government that called in the dogs to protect the profits of the corporation. I hardly blame this on the market. Rather, I squarely blame this on the intrusive nature of the government in manipulating market conditions.

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Actually I blame this on the market unable to correct the corporations, for that matter, if the corporation has achieved monopoly status, like Microsoft.

Again, I'm not advocating that we ought to not have any testing. I'm simply saying that the government ought not have a monopoly in this area. After all, the government is just an entity that offers a set of services, such as law enforcement, registering vehicles, providing schooling, managing your retirement funds, funding your doctor visits, and of course, safety testing and regulation. What I am vehemently opposed to is the idea that the government ought to have a monopoly over all of these services. Who is the government to say that they are the most efficient in conducting product testing? Who is the the government to say that they ought to have the power to force you put money in its funds, earning no returns whatsoever and possibly never recovering that money. Can you imagine getting a letter from Merrill Lynch saying that the you are going to have to put 10% of your payroll earnings into an account at Merrill? Well, that's what the government is telling you.

The government has a monopoly on secondary education. Poor people can not afford to choose to send their kids to better schools. Look at the sorry conditions of today's public schools. That is what you have when you have a government monopoly.

The government used to have a monopoly in the postal service. Well, it is so inefficient due to the lack of competition and so many people were fed up with it that it eventually gave way to private enterprise.

Look, I'm not saying the government can't perform those functions. All I am saying that it is wrong for the government to say that no one else is allowed to compete for on the basis of quality and cost. Similarly, if the Chinese government is criminally guilty, then it seems to me that the right thing to do is to pass the torch on to private enterprises.

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When I look at the private schools, yes I send my daughter to private school, the quality is high but the costs are so expensive. I cannot see how the average person can afford many of the private schools. Having to go to a public school is the lesser of two evils, the other one being not able to go to school at all because of the cost.

Postage. FedEx and DHL charges a lot more for what USPS does, and yet I never found them to deliver things faster than USPS except for emergency overnight deliveries. For the most part, 99.9% of the things I send through USPS gets there, most promptly, a few get delayed but almost always, gets there.

Independent product testing. Why leave it for private enterprise when there is little money that can be made there, or if said testing facility is actually funded by one of the corporations, which represent a conflict of interest.

crobato said:

Actually I blame this on the market unable to correct the corporations, for that matter, if the corporation has achieved monopoly status, like Microsoft.

When I look at the private schools, yes I send my daughter to private school, the quality is high but the costs are so expensive. I cannot see how the average person can afford many of the private schools. Having to go to a public school is the lesser of two evils, the other one being not able to go to school at all because of the cost.

Postage. FedEx and DHL charges a lot more for what USPS does, and yet I never found them to deliver things faster than USPS except for emergency overnight deliveries. For the most part, 99.9% of the things I send through USPS gets there, most promptly, a few get delayed but almost always, gets there.

Independent product testing. Why leave it for private enterprise when there is little money that can be made there, or if said testing facility is actually funded by one of the corporations, which represent a conflict of interest.

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How is the market supposed to correct the corporation when the Rockfellers and the Lord Jamies have government troops with live ammunition behind their backs? That is absolute nonsense, I must say. Likewise, how do you expect people to stop buying faulty products when the government holds a monopoly on information and chooses to protect the interest of the corporation by withholding unfavorable information. To me, and really to any logic view, the involvement of the government has caused huge market distortions.

In terms of schooling, that's why there ought to be vouchers, so that the poor, who normally would have to pay taxes anyway to support the shoddy public schools in their local districts, could get some of their tax dollars back and send their kids to a better school of their own choice. There is something fundamentally wrong in a system where the government tells the parent where their kids have to go to school without any consideration to the actual conditions of those schools.

Again, the point isn't to force USPS go out of service. Indeed, if the consumer finds that he or she would get a better bargain by using USPS, then it is perfectly preferable that that's where the revenue are going. What I am opposed to is having a system of government monopoly, where the government tells you that the only service provider for a given industry ought to be just the government. And regarding the cost issue, don't think for one second that the actual 'cost' of your mail delivery through USPS is what you pay at the counter. For any government services provided, there is always a corresponding government bureau, which houses the offices of government bureaucrats that are on payroll from your tax dollars. Without the private competition, there would be no incentive to promote any kind of cost saving measures or increase efficiency.

The reason that there is little money to be made in independent product testing is that the government holds a monopoly on such service. In case of China, I would argue that with the emergence of a consumer class hundreds of millions strong, there are huge gaps in information where private enterprise, if allowed to, could collect and disseminate information.

Hey Guys, digest on this:

If you read about Singapore and its mentor Lee Kuan Yew, you have have come across some of his basic but very effective methods to combat corruption.

I remember how he combat corruption in government depts by private business by making it a rule that any private enterprises that invites heads of departments for meetings outside the office must also invite other heads in the same dept for the meeting.

The private businessmen would therefore have to bribe all the heads if he wanted to do anything fishy therefore making the cost prohibitive and arousing the suspision of the anti corruption agency.

This is just one of his down to earth ways to combat corruption and it works pretty well.

Seems China did send teams to study Singapores political methods and ways of ruling. Jiang Zemin was among them, I believe. He was not the President then.

The conclusion was that it was prohibite expensive for China to follow Singapore methods because Singapore pays its top civil servants and government employees generous wages to prevent corruption but they have to perform. Indeed most of the top government performing ministers receive wages equilavent to the wages of CEO of multinationals.

Now some of you were saying that local officials embezzle billions from public coffers so I do not understand why the Singapore method won't work?

dlhh said:

Hey Guys, digest on this:

If you read about Singapore and its mentor Lee Kuan Yew, you have have come across some of his basic but very effective methods to combat corruption.

I remember how he combat corruption in government depts by private business by making it a rule that any private enterprises that invites heads of departments for meetings outside the office must also invite other heads in the same dept for the meeting.

The private businessmen would therefore have to bribe all the heads if he wanted to do anything fishy therefore making the cost prohibitive and arousing the suspision of the anti corruption agency.

This is just one of his down to earth ways to combat corruption and it works pretty well.

Seems China did send teams to study Singapores political methods and ways of ruling. Jiang Zemin was among them, I believe. He was not the President then.

The conclusion was that it was prohibite expensive for China to follow Singapore methods because Singapore pays its top civil servants and government employees generous wages to prevent corruption but they have to perform. Indeed most of the top government performing ministers receive wages equilavent to the wages of CEO of multinationals.

Now some of you were saying that local officials embezzle billions from public coffers so I do not understand why the Singapore method won't work?

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Yes, you may have a couple of enlightened governments here or there, governments that actually tries to serve the interests of the people rather than doing what is politically expedient. But by and large, the vast majority of human history is filled with dictators and despots who promote their interests and other special interests for mainly the elites in the name of protecting the masses. It seems to be that the way by which a government ought to be measured should emphasize the issue of longevity. So far, and history has proven this again and again, no matter how one powerful ruler may be enlightened or just, the successive rulers always evolve into monsters until they too are pushed out of power. For a stable system to work, it's best to take the power out of the hands of the bureaucrats, like Hong Kong has done, and let the people run their own business. I don't hear about people bribing officials in Hong Kong. Why? because officials there don't hold much power over business freedom. That is not the case in China, where everything from obtaining the approval for a merger to getting a city registration has to come from government officials. Dead weight loss.

FugitiveVisions said:

For a stable system to work, it's best to take the power out of the hands of the bureaucrats, like Hong Kong has done, and let the people run their own business. I don't hear about people bribing officials in Hong Kong. Why? because officials there don't hold much power over business freedom.

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Hong Kong was one of the most corrupted places on the planet where every government employee are freed to take bribes until the creation of ICAC. Although ICAC has some questionable practices such as threatening suspects, lying in courts, and destroying evidences of defendants, it is also because of these reasons that they are highly successful in convicting their targets.

Maucu, which is right beside Hong Kong, still have bribery and there was this giant corruption case a short while back. This shows that it is the ability to enforce anti-corruption laws rather than promoting freedom which reduces the amount of corruption.

Both Singapore and Hong Kong are also special in that they are small and therefore easier to manage. Local officials in China often take the altitude of "emperor is far away and there is a mountain in between", which is true, making the fight against corruption in China more difficult.

FugitiveVisions said:

Yes, you may have a couple of enlightened governments here or there, governments that actually tries to serve the interests of the people rather than doing what is politically expedient. But by and large, the vast majority of human history is filled with dictators and despots who promote their interests and other special interests for mainly the elites in the name of protecting the masses. It seems to be that the way by which a government ought to be measured should emphasize the issue of longevity. So far, and history has proven this again and again, no matter how one powerful ruler may be enlightened or just, the successive rulers always evolve into monsters until they too are pushed out of power. For a stable system to work, it's best to take the power out of the hands of the bureaucrats, like Hong Kong has done, and let the people run their own business. I don't hear about people bribing officials in Hong Kong. Why? because officials there don't hold much power over business freedom. That is not the case in China, where everything from obtaining the approval for a merger to getting a city registration has to come from government officials. Dead weight loss.

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i agree with what engineer said there. i remember there was this one conversation between Deng Xiaoping and Lee Kuan Yew and Deng said that if he only had to govern a place as large as Shanghai he would have done as good a job as Lee if not better. Lee agreed with him, i do too.
its proposterous to compare governing a city or a city-state with the extreme complexity of governing China. i bet can find cities or counties in China that are not corrupted or at least is quite successful in its anti-corruption effort. 2000 years of build up of bureaucracy is not something you can eliminate with an ostensibly failing system borrowed from the west. mind you that nine times out of ten when China tries something that is foreign it fails. so the solution has to come from within China. and that is not easy to develop. look at europe from magna carta to the french revolution.
also mind you that government corruption is not the only form of corruption, prolly not even the worst form of corruption. i learned that lesson from the US. and you of all persons should realize that to. you claim that human history is filled with all this and all that, i doubt you'd do better if you were in their place

pla101prc said:

i agree with what engineer said there. i remember there was this one conversation between Deng Xiaoping and Lee Kuan Yew and Deng said that if he only had to govern a place as large as Shanghai he would have done as good a job as Lee if not better. Lee agreed with him, i do too.
its proposterous to compare governing a city or a city-state with the extreme complexity of governing China. i bet can find cities or counties in China that are not corrupted or at least is quite successful in its anti-corruption effort. 2000 years of build up of bureaucracy is not something you can eliminate with an ostensibly failing system borrowed from the west. mind you that nine times out of ten when China tries something that is foreign it fails. so the solution has to come from within China. and that is not easy to develop. look at europe from magna carta to the french revolution.
also mind you that government corruption is not the only form of corruption, prolly not even the worst form of corruption. i learned that lesson from the US. and you of all persons should realize that to. you claim that human history is filled with all this and all that, i doubt you'd do better if you were in their place

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Let me just say that it never fails to astound me whenever I hear someone uses the "2000 years of history" argument in defense of an all powerful Chinese government. If history has taught you anything, it is that such governments have again and again, without failure, ended in human tragedies after human tragedies.

Your reply again implies that I want China to totally adopt a Western style democratic government. That is not what I want to do. Political freedom is not something that would promote the social stability of China right now, I agree. But what you are having a tough time understanding is that economic freedom is different from political freedom, that the 'western-style' economic freedom has in fact been embraced by the Chinese society at large, and has without dispute, resulted in the best living standards that the Chinese people have ever enjoyed in their long history. All I propose is that we ought to go down this proven road of success even further, so that the rest of the dead weight loss in the system can be cut out faster. Again, in lean times like these, China can't afford to continue feeding the fat pigs at the bureaucracy.

FugitiveVisions said:

How is the market supposed to correct the corporation when the Rockfellers and the Lord Jamies have government troops with live ammunition behind their backs? That is absolute nonsense, I must say. Likewise, how do you expect people to stop buying faulty products when the government holds a monopoly on information and chooses to protect the interest of the corporation by withholding unfavorable information. To me, and really to any logic view, the involvement of the government has caused huge market distortions.

In terms of schooling, that's why there ought to be vouchers, so that the poor, who normally would have to pay taxes anyway to support the shoddy public schools in their local districts, could get some of their tax dollars back and send their kids to a better school of their own choice. There is something fundamentally wrong in a system where the government tells the parent where their kids have to go to school without any consideration to the actual conditions of those schools.

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The government doesn't tell the parent where they can school their kids. But its because the parent has no other options. Not anyone can afford private school.

If you use the voucher system, how much do you expect private schools to charge the government? That will merely add to the deficit.

FYI, the public school system is the one main fundamental reasons for the prosperity of the USA for well over a century. It led to a high literacy rate in the population. Its success led to similar systems being made around the world---including China where its high literacy rate is considered a fundamental key to its economic success.

The decay of the US public school system is a phenomenon that seems strictly within the US itself, and not because the concept itself is flawed but this decay is due to cultural factors surrounding the schools. If the concept is flawed, then every other public school system in other countries should have common flaws right? If scores from the US public school system is lower than than kids from Korea, Japan and China, its not the fault of the public school system as a concept, because all those CJK kids are also coming out from public school systems.

Understand this, the alternative economic cost of having an illiterate population, especially with teenagers and adults, would be far higher. Not just in poverty, but anything from crime rates to social disorder.

Again, the point isn't to force USPS go out of service. Indeed, if the consumer finds that he or she would get a better bargain by using USPS, then it is perfectly preferable that that's where the revenue are going. What I am opposed to is having a system of government monopoly, where the government tells you that the only service provider for a given industry ought to be just the government. And regarding the cost issue, don't think for one second that the actual 'cost' of your mail delivery through USPS is what you pay at the counter. For any government services provided, there is always a corresponding government bureau, which houses the offices of government bureaucrats that are on payroll from your tax dollars. Without the private competition, there would be no incentive to promote any kind of cost saving measures or increase efficiency.

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None of the private competition is willing to deliver mail around the US for .41 cents. Neither will UPS or DHL deliver packages for less than five dollars for a pound. The USPS actually makes money. Private companies cannot have the sheer volume of scale that is important for the efficiency required.

The reason that there is little money to be made in independent product testing is that the government holds a monopoly on such service. In case of China, I would argue that with the emergence of a consumer class hundreds of millions strong, there are huge gaps in information where private enterprise, if allowed to, could collect and disseminate information.

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Only the government can be truly neutral when it runs independent product testing which can be very expensive. If a private institution finances product testing, its neutrality would be in doubt in relation to whoever pays for this institution. If a series of leading companies in an industry decides to form a standard on their own, then creates an institution to do that product testing, then so much the better. That would be a case of self regulation and policing. Lawyers bars are an example. Another are the various standards created within the computer industry.

However many industries don't do that, so the government has to step in until this industry as a whole decides to formalize standards and testing. The auto industry is one example where no consensus has ever been made on standards and testing, leading to the government interventions of Detroit in the sixties. In every developed country, automobile regulations are there and tight, and it should be noted that it is tightest in countries like Germany and Japan where the best cars are made.

I am all for reining in local officals, but I don't see your solutions will improve things. China have to deal with the situation over the past 3000 years, and corruption is still as rampant as today as it was then. If 3000 years of fighting corruption isn't solving anything, your simple solutions isn't going to do anything either.

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Governing a large country with a so many provinces with different agendas is not simple. However, China's legacy of corruption proves the present system of governance won't solve the problem either.

What is needed is solutions that are not tried before. Seems to me that the main problem is China's fuedal legacy. Being conditioned to the emperor-slave relationship for so long, the rural people of China will take a long time to shake off this mindset.

There are a lot of talented people in Singapore, Hong Kong & the rest of the world that are looking for challenges, to make their life more meaningful. This are people that are rich and not looking for more wealth but to make contributions that very enrich their lifes in other ways.

Suppose they are hired to the most backward provinces or the provinces with the most corruption & social problems to govern and the power to have the last say in social & economic projects, won't it be something worth trying.

Of course, there would be terrible blow to China's ego & powers to be that will try to sabotage this project all the way.

But looking at all your arguments, China doesn't seem any closer to to solving this problems. New, out of the box solutions ought to be tried out.

No matter how much you think Singapore's small size make its experiences irrelevant, remember when it was born, nobody gave it much of a chane to survive.

Survived, it did not by forever being a victim of its history but by seeking and trying out new solutions.