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socialism Archive

Friday

2

December 2011

1

COMMENTS

Andy Stern Endorses Chinese-Style Central Planning

Written by , Posted in Economics & the Economy, Free Markets

In one of the most outlandish economic screeds we’re likely to see for some time, Obama buddy and former SEIU President Andy Stern has declared his love for Chinese style economic planning, and wishes for the same in America:

I was part of a U.S.-China dialogue—a trip organized by the China-United States Exchange Foundation and the Center for American Progress—with high-ranking Chinese government officials, both past and present. For me, the tension resulting from the chorus of American criticism paled in significance compared to reading the emerging outline of China’s 12th five-year plan. The aims: a 7% annual economic growth rate; a $640 billion investment in renewable energy; construction of six million homes; and expanding next-generation IT, clean-energy vehicles, biotechnology, high-end manufacturing and environmental protection—all while promoting social equity and rural development.

Some Americans are drawing lessons from this. Last month, the China Daily quoted Orville Schell, who directs the Center on U.S.-China Relations at the Asia Society, as saying: “I think we have come to realize the ability to plan is exactly what is missing in America.” The article also noted that Robert Engle, who won a Nobel Prize in 2003 for economics, has said that while China is making five-year plans for the next generation, Americans are planning only for the next election.

American needs more 5 year plans! This sounds so familiar…

For those of us who love this country and believe America has every asset it needs to remain the No. 1 economic engine of the world, it is troubling that we have no plan—and substitute a demonization of government and worship of the free market at a historical moment that requires a rethinking of both those beliefs.

America needs to embrace a plan for growth and innovation, with a streamlined government as a partner with the private sector. Economic revolutions require institutions to change and maybe make history, because if they stick to the status quo they soon become history. Our great country, which sparked and wants to lead this global revolution, needs a forward looking, long-term economic plan.

It’s hard to know where to begin. Perhaps the most obvious starting point is his rosy view of the Chinese economy, which while improving, is still pretty bad. Pointing to their growth rate, for instance, doesn’t tell us much as they have considerably more room to grow.

Even his contention that China will surpass the US as the largest economy by 2025 (a reasonable estimate, I think) is misleading. They have 3 times the population that we do, so matching us in economic output means they are still only one-third as productive. What’s noteworthy, however, is how utterly poor so much of China remains today. For all their growth, they still have 128 million people living on less than $1 a day. That kind of poverty is all but unheard of in the US. As Dan Mitchell points out, the overall Chinese standard of living is simply a lot lower than it is here. Their per capita GDP is not even 25% that of the US. Why on Earth would we want to mimic them, as opposed to Singapore, which has both a freer market and higher per capita GDP than the US?

Contra Stern, the US does not employ a “free-market fundamentalist economic model.” There are economically freer nations, and according to the Heritage Index of Economic Freedom, we are becoming less and less economically free over time. In other words, we are already in the process of transitioning to the more centralized economy desired by Stern. It is that very shift which is holding us down.

But the fundamental flaw in his argument is Stern’s call for more planning. He favorably summarized Robert Engle as saying “that while China is making five-year plans for the next generation, Americans are planning only for the next election.” This is patently false, and confuses planning for central planning.

Planning is all around us. Businesses plan for future products, innovations, investments and expansions. Workers plan for climbing the ladder, providing for their families, and retirement. We have plans by the plenty, but Stern hardly notices. He doesn’t care about all these plans, but wants only one – by government.

What is the basis for his belief in the superiority of a single government plan over the aggregate plans of free people? There is no evidence for this belief that I can find. In every instance where one has been pitted against the other, the single plan as failed miserably. The information transmitted by individual transactions, through prices and countless other signals, is too vast to ever be captured, much less understood, by any single entity. In short, the planning of a benevolent economic dictatorship of the sort desired by Stern is no match for the planning of a truly free market.

Saturday

2

January 2010

0

COMMENTS

The G Stands For Government

Written by , Posted in Economics & the Economy

GMAC is the latest entity in which the federal government has taken a majority stake:

The federal government said Wednesday that it will take majority control of troubled auto lender GMAC and provide an additional $3.8 billion in aid to the company, which has been unable to raise from private investors the money it needs to staunch its losses.

Is it just me, or would it not be obviously beneficial to stop and ask just why it is that private investors aren’t willing to give them money? Perhaps there is a lesson we can learn from them that would be of benefit to the taxpayers responsible for producing this $3.8 billion.

The Treasury Department has said for months that GMAC would need more federal money, but the decision to increase the government’s ownership stake came as a surprise, cutting against the grain of the Obama administration’s recent efforts to wind down its bailout of large banks.

Who could they possibly have found that is surprised by yet another foray into the private sector by this interventionist White House? Under what rock must such a person have been living for the last year?

Wednesday

30

December 2009

1

COMMENTS

Venezuala's Public Option

Written by , Posted in Big Government

Does this reasoning sound familiar?

President Hugo Chavez on Tuesday announced a new chain of government-run, cut-rate retail stores that will sell everything from food to cars to clothing from places such as China, Argentina and Bolivia.

“We’re creating Comerso, meaning Socialist Corporation of Markets,” Chavez said at the opening of a “socialist” fast-food location for traditional Venezuelan arepas (cornbread).

“They’ll see what’s good. We’ll show them what a real market is all about, not those speculative, money-grubbing markets, but a market for the people,” said Chavez in his drive to change Venezuela from a market-based economy to a socialist one.

“We’re going to challenge all that junk food that just fattens people up,” he added referring to the arepa stand he opened to the public.

…”We’re going to defeat speculation. Private individuals in sales can still sell, but they’ll have to compete with us and with a people who is now fully aware,” Chavez said.

Chavez has taken the Democrats aborted plans for a “public option” in health insurance and applied it to, well, everything.

You have to feel sorry for the people of Venezuala as their country is destroyed around them by the failed ideas of the 20th century.

Tuesday

10

November 2009

0

COMMENTS

News Flash: Socialism Still Failing

Written by , Posted in Foreign Affairs & Policy

Twenty years after the fall of the Berlin Wall and some still find “perplexing” the failures of socialism:

This country may be an energy colossus, with the largest conventional oil reserves outside the Middle East and one of the world’s mightiest hydroelectric systems, but that has not prevented it from enduring serious electricity and water shortages that seem only to be getting worse.

President Hugo Chávez has been facing a public outcry in recent weeks over power failures that, after six nationwide blackouts in the last two years, are cutting electricity for hours each day in rural areas and in industrial cities like Valencia and Ciudad Guayana. Now, water rationing has been introduced here in the capital.

The deterioration of services is perplexing to many here, especially because the country had grown used to cheap, plentiful electricity and water in recent decades. But even as the oil boom was enriching his government and Mr. Chávez asserted greater control over utilities and other industries in this decade, public services seemed only to decay, adding to residents’ frustrations.

In other South American news:

Populist leaders in Latin America are increasingly making legal and political moves to silence their critics in the media, the president of the Inter American Press Association said Friday.

The leaders’ tactics include revoking broadcast licenses, fostering hostility toward journalists and giving a free hand to government supporters who have attacked broadcast stations, newsrooms and printing plants, said the association’s president, Enrique Santos Calderón.

The headline reads, “Latin American Leaders Seek to Rein in Media, Press Group Says,” but thanks to the President’s war on Fox News, the ‘Latin’ qualifier for such stories has been rendered superfluous.

Saturday

10

October 2009

0

COMMENTS

Not A Joke

Written by , Posted in General/Misc.

I’m sure most of you reacted the same way I did upon seeing that Barack Obama had won the Nobel Peace prize: “This has got to be a joke.” I realize it’s cliché to claim that reaction to unlikely news, but in this case I literally assumed someone had fallen for a clever piece from The Onion.  Alas, that was not the case.

I know for a fact many are still perplexed, as the top search on Google for most of the day was “obama nobel peace prize for what.” For what, indeed.

The answer is fairly simple, though.  The prize is for being a dedicated statist. The Nobel Peace prize, you see, has never been anything but an ideological prize, a treat to re-enforce what European leftists consider positive behavior.

I think the awarding of the prize to Obama after so short a tenure in office is a gift for those of us who have long lamented the worthlessness of the prize. Questioning its worth is now a mainstream endeavor, as the prestige of the “Nobel” label has been wiped away to reveal nothing but a silly little trophy awarded by a sadly loyal group of adherents to a dying philosophy.