Why is Communist China better at capitalism than we are?
Because they understand macroeconomics.
China’s premier outlined plans Monday to fuel domestic consumption, including subsidies for social programs and higher spending for businesses, as the government grapples with a slowing economy and rising public demands for greater fairness.
In a speech that is China’s equivalent of the state-of-the-nation, Premier Wen Jiabao offered increased assistance and programs to benefit a wide array of groups: higher minimum wages, heftier subsidies for education and farmers, more loans for strapped private businesses and added help for troubled exporters. He called for more paid vacations for workers and expanded consumer credit.
American leadership (at the Federal and State levels)? Not so much.
But one significant factor in our continuing economic weakness is the fact that government in America is doing exactly what both theory and history say it shouldn’t: slashing spending in the face of a depressed economy.
In fact, if it weren’t for this destructive fiscal austerity, our unemployment rate would almost certainly be lower now than it was at a comparable stage of the “Morning in America” recovery during the Reagan era.
Notice that I said “government in America,” not “the federal government.” The federal government has been pursuing what amount to contractionary policies as the last vestiges of the Obama stimulus fade out, but the big cuts have come at the state and local level. These state and local cuts have led to a sharp fall in both government employment and government spending on goods and services, exerting a powerful drag on the economy as a whole.
Thanks, Governor Walker.
What does it say about the power of the neoliberal “free-market” advocates when they’re getting their asses handed to them by Communist China? It says they don’t know what the hell they’re doing.
In a related post, we see how Western corporations sought to weaken worker protection including collective bargaining in China, in a very real race to the bottom for labor. This is, naturally supported by The Cato Institute which is a front for Koch but poses as libertarian think tank. The trick is to have American workers in competition with Chinese workers- something that is a no-win situation for both countries.
http://nomadicpolitics.blogspot.com/2012/03/betraying-our-values-abroad-how-western.html
Chinese workers are getting a little pissed off. I’m aware of one recent incident in which workers burned their factory down and another in which illegally striking workers smashed all the windows in the factory with rocks while the riot police stood idly by and let them do it. The factory owner refused to show up for negotiations because he was afraid of being lynched.
Collective bargaining doesn’t look so bad in those circumstances.
It’s really up to the unions in both countries to unite and demand the same standards for both Chinese and American workers. And governments can help, by not caving in to special interests and by demanding from its trading partners, at least, a minimum of wage and safety levels for workers. How likely is that to happen in the real world, I wonder.