the author is a moron, because
(i) he is an academic working at mit
let me take his pointlessness one at a time, per below
<<Not only has economic power gravitated toward the East, they argue, but we are experiencing a doctrinal shift—state capitalism, Chinese-style, is burying market economics.>>
... chinese state capitalism in combo with chinese private capitalism are not burying market economics, but beating the pants off of state-sponsored financial terrorism and national embraced ponzi fiat fraud. as long as the good professors at mit fail to acknowledge the truth, they shall never understand the facts.
<<Before popping the champagne bottle, guess which country boasted the following characteristics: GDP grew at 11% annually for almost 10 years. The authoritarian, one-party state promoted rapid industrialization by relocating workers to coastal urban areas. The government welcomed foreign-direct investment and courted companies through tax exemptions and other benefits. Seventy-five percent of the top 100 largest domestic firms' assets belonged to the state sector. The government's savings rate doubled in less than a decade, while the agricultural share of employment fell by more than one-third over the same period.
Sounds like China, right?>>
... effectively all nations, and all states, at one point or another, relatively speaking, including team usa of 1776.
<<No: It's Brazil from 1965 to 1974. Few remember that under junta rule, that country achieved "miracle" growth for a decade. Brazil certainly hasn't kept it up.>>
... and so neither would america.
<<Understanding what went wrong there is key to parsing the claim that China's Brazil-like growth model, the so-called "Beijing Consensus," has proved its superiority over the deregulated capitalism of the "Washington Consensus" after the recent financial crisis.>>
... we would never know the outrcome of the competition the good professor, and just that, a professor, theorizes, because what washington has to do with 'deregulated capitalism' is only and just an academic discussion.
No particular need to talk about brazil. any other nation would do as well or badly as reference for china puzzle, that which the professor cannot possibly understand.
<<This matters because today's Beijing Consensus is really just a replay of Brazil's trajectory during its golden era. Many of the same ingredients are there—a strong one-party state calling the shots, the resulting inefficiencies in investment allocation and high debt levels.>>
... i guess that working theory would write off the tang dynasty and discount the ming dynasty. calling the professor a moron is being kind to him.
<<Like the Brazil of the 1960s, China's economy is not fueled by household consumption, but rather, by state investment>>
... 40% of french luxury brands' profit are made in china already. should china household consumption match its necessary infrastructure investment, there would not be anything left for the good professor to consume. naming the professor as prime idiot is being gentle.
<<Contrary to the prevailing views, China's investment-driven growth has nothing to do with a high household savings rate. In fact China's household-savings rate is not particularly high; it is about the same as that of India—around 23%.>>
... i see, 23% is not high. 46% is moderate. 69% is high. see, that be how household consumption can match infrastructure investment. question, how many mouths do the professor have?
<<The majority of China's GDP gains have gone to the government and corporations>>
... really? the farmers along the coast must not have gotten rich, and that is why they are flooding into paris to buy things. the state corporations do not spend the profit but banks it all, and that creates the 23% savings which cannot be attributed to individuals spending in paris? the professor should start career in comedy.
<<State capitalism, in China and elsewhere, is effective in boosting GDP growth but is very bad at growing personal income>>
aha, that is why personal income grew to extent that there is so much spending in and outside of china by peasants. why does the professor bother to write?
<<Personal income relative to GDP per capita is now around 50% compared with 70% in most other countries.>>
... and that 20% makes the difference between stability and chaos, but is otherwise to be made fun of.
<<Many Western analysts credited China's 8.7% GDP growth in 2009 to the magical power of the Beijing Consensus. The explanation is actually far simpler: a massive accrual of debt>>
yeup, but the debt is doing good, as opposed to ending up in a banking hole, leaving a big nothing yet to be worked off by many future generations.
<<Research by Northwestern University's Victor Shih shows that the true level of China's public debt is closer to 100% of GDP rather than the 22% figure estimated by the International Monetary Fund>>
... interesting research. what is public debt in context of state capitalism? oh, yes, equity. victor shih is as clever as mr huang.
<<Years of wage suppression—now fueling labor unrest—have emaciated domestic consumption as a growth driver, leaving the government with no choice but to resort to debt-financed investments to counteract the recession in the West.>>
... interesting to call the planetwide gold-denominated depression a recession. but never mind. wages are now moving up strongly in china, by 30-70% at one go, and there is a labour shortage, after real price gains over the past 30 years per proper macro guidance and micro fine tweeking. surely better than any group of mit anything and washington anything else could manage.
<<This raises a key weakness of the Beijing Consensus: the sustainability of GDP growth in light of changing credit conditions. The question is not whether China can keep growing when capital is abnormally cheap—any country could>>
... that sentence is prime proof of the professor's singular inability to observe and learn / watch and interpret. meaning the professor is either blind, and/or stupid.
<<—but whether it will continue to grow when monetary conditions normalize>>
... we will soon find out. which nation will normalize first?
<<Here the contrast with India is remarkable: The Chinese economy expanded by 11.9% compared with India's 8.6% in the first quarter of this year. But India has invested less than what China has invested and its stimulus program, a combination of modest government spending and tax cuts, paled in comparison with China's massive four-trillion-yuan ($580 billion) spending spree.>>
... india's inability to get infrastructure organized quickly is championed by the good prof as a positive. too funny.
<<India has also raised interest rates twice in recent months. By contrast, China has steadfastly refused to raise rates, despite the fact that monthly inflation is now exceeding 3%, a level implicitly held as the policy goal by the central bank.>>
... india cannot take the necessary medicine in order to take advantage of the pre-darkest interregnum to grow, and transition. china can. whatever china can print, china can take, and make good use of, to sate 600 years of pentup demand.
<<This is a sure sign of Beijing's addiction to investment-driven growth and of how precariously sensitive the level of bad debts is to any increase in today's low or possibly below-zero interest rates.>>
... it is amusing that the prof cannot take a pee in a gold pan and stare at own reflection to discern the truth.
<<In the short- to medium-term, China's economic prospects will be determined by how well it manages to stimulate personal income growth while weaning the country off its debt addiction, without a hard landing that would surely come with a bursting of the housing bubble>>
... how does one have a leverage-lite housing bubble when there is still not nearly enough built space for folks to live in? never mind, we shall see.
<<Authorities are trying to do that now by allowing labor strikes for higher wages and putting some curbs on housing markets. That's a good start, but the transition is also fraught with risks, such as political instability and an erosion of competitiveness>>
... china has been at the precipice of hard landing for 30 years, and doing well because of that danger. the professor should teach chinese language, as his brand of economics seem rather senseless.
<<Let me end by telling you about another country; one which defied the rest of the world during the depth of the Great Depression. It could invest at a higher rate and could grow fast, at a time when the U.S. suffered 25% unemployment levels. That country was admired by many other poor countries, some of which subsequently emulated its economic and political systems. The name of that country was the Soviet Union. We know how that story ended.>>
.. so, china is more reasonably compared to the soviet union than brazil? lol
like i noted, prof huang is a moron, would not be able to gain a position at tsinghua university, but adequate for mit, maybe even harvard, the school that did-in russian renaissance. |
