China’s Great Leap Forward: Western Frogs Croak Dismay
JAMES PETRAS • MARCH 23, 2017 • 1,600 WORDS
-Chinese workers are closing the gap with the US minimum wage. At the current rate of growth, the gap, which had narrowed from one tenth to one half the US wage in ten years, will disappear in the near future.
-Faced with growing US political and military hostility, China has diversified its export market, turning from the US to Russia, the EU, Asia, Latin America and Africa.
-The Chinese government is alone among nations in keeping up with and even exceeding its growing transportation needs – spending $800 billion a year on high speed railroads, rail lines, sea- ports, airports subways and bridges.
-Unlike China, the US is wallowing at less than 2% annual growth. Wages stagnate for decades; real wages and living standards decline. The costs of education and health care skyrocket, while the quality of these vital services decline dramatically. Costs are growing, un-employment is growing and worker suicide and mortality is growing.
[Dean Baker predicted the crash of the United States housing bubble, which occurred in 2007–08. He warned about the coming crisis and the related government policies in several media interviews from 2002 to 2005. Basing his outlook on house-price data-sets produced by the US government, Baker asserted that there was a bubble in the US housing market in August 2002, well before its peak, and predicted that the collapse of this bubble would lead to recession. His prediction for when this recession would hit was out by only one quarter.
Regarding the housing bubble, Baker has been critical of chairman of the Federal Reserve, Alan Greenspan.
He has been critical of the regulatory framework of the real estate and financial industries, the use of financial instruments like collateralized debt obligation, and the performance and conflict of interest of US politicians and regulators.
Baker opposed the US government bailout of Wall Street banks on the basis that the only people who stood to lose from their collapse were their shareholders and high-income CEOs. Regarding any hypothetical, negative effects of not extending the bailout, he explained, “We know how to keep the financial system operating even as banks go into bankruptcy and receivership,”citing US government action taken during the S&L crisis of the 1980s. He has ridiculed the US elite for favoring it, asking, “How do you make a DC intellectual look less articulate than Sarah Palin being interviewed by Katie Couric? That’s easy. You ask them how failure to pass the bailout will give us a Great Depression.”
The Wrongest Profession
How economists have botched the promise of widely distributed prosperity—and why they have no intention of stopping now
by Dean Baker
Over the past two decades, the economics profession has compiled an impressive track record of getting almost all the big calls wrong.
If China is removed from the sample, the performance of the rest of the developing world since 1988 looks rather mediocre. While the pain of working people in wealthy countries is acute, they are not alone. Outside of China, people in the developing world have little to show for the economic growth of the last three and a half decades. As for China itself, the gains of its huge population are real, but the country certainly did not follow Washington’s model of deficit-slashing, bubble-driven policies for developing countries.
In this economic climate, it’s not surprising that a racist, xenophobic, misogynist demagogue like Donald Trump could succeed in politics, as right-wing populists have throughout the wealthy world. While his platform may be incoherent, Trump at least promised the return of good-paying jobs. Insofar as Clinton and other Democrats offered an agenda for economic progress for American workers, hardly anyone heard it. And to those who did, it sounded like more of the same.
Here’s one handy way to break down the real-world costs of deficit hawkery. The cries for fiscal prudence that come from folks like Timothy Geithner and Paul Ryan, which are echoed in the media by the Washington Post and other major outlets, are costing us almost $2 trillion a year in annual output. This amount comes to more than $6,000 per person per year or $24,000 for an average family of four. These deficit hawks are ensuring that our children and grandchildren will live in poverty.
Yes, I’m inverting the traditional alarms raised by deficit hawks about the calamities of intergenerational indebtedness and throwing them in their faces, precisely so we can catalog the ways in which they’ve been spreading nonsense to push bad economic policies for decades. These bad policies have steep and lasting costs, especially following the collapse of the housing bubble and the Great Recession. The constant fear-mongering of the deficit hawks prevented the government from spending the money required to push the economy back to full employment. There was nothing to replace the construction and consumption spending that had been driven by the bubble.
FRED REED • MARCH 23, 2017 • 1,100 WORDS
The philosophy of Arthur Schopenhauer, which we’ve been discussing for several weeks now, isn’t usually approached from the angle by which I’ve been approaching it—that is, as a way to talk about the gap between what we think we know about the world and what we actually know about it. The aspect of his work that usually gets all the publicity is the ethical dimension.
To a very great extent, if I may insert a personal reflection here, this realization has been at the heart of this blog’s project since its beginning. The peak oil crisis that called The Archdruid Report into being came about because human beings have as yet no clear idea how to get along with the biosphere that supports all our lives; the broader theme that became the core of my essays here over the years, the decline and fall of industrial civilization, shows with painful clarity that human beings have as yet no clear idea how to deal with the normal and healthy cycles of historical change; the impending fall of the United States’ global empire demonstrates the same point on a more immediate and, to my American readers, more personal scale. Chase down any of the varied ramblings this blog has engaged in over the years, and you’ll find that most if not all of them have the same recognition at their heart: we don’t yet know how to live, and maybe we should get to work figuring that out.
A REPORTER AT LARGE
MARCH 27, 2017 ISSUE
THE RECLUSIVE HEDGE-FUND TYCOON BEHIND THE TRUMP PRESIDENCY
How Robert Mercer exploited America’s populist insurgency.
By Jane Mayer
Magerman told me, “Bob believes that human beings have no inherent value other than how much money they make. A cat has value, he’s said, because it provides pleasure to humans. But if someone is on welfare they have negative value. If he earns a thousand times more than a schoolteacher, then he’s a thousand times more valuable.” Magerman added, “He thinks society is upside down—that government helps the weak people get strong, and makes the strong people weak by taking their money away, through taxes.” He said that this mind-set was typical of “instant billionaires” in finance, who “have no stake in society,” unlike the industrialists of the past, who “built real things.”