David Leonhardt has made the brave attempt to try and capture the relationship between China and the United States which is now developing. It says as much, and as little, as any of these endeavors. The basic problem for American observers comes from the fact that China is an ancient civilization, possessing all the power, control, and resistance of an adult society. Americans insist on viewing China as backward and undeveloped; while Chinese recognize themselves as cultured and wise in the ways of personal and commercial politics. Americans do not grasp the significance of six thousand years of civilization, which also means an equal time of political corruption. Americans fail to interpret Chinese resistance to modern technology and social structure, believing it stupid or at best unenlightened; never realizing it is a polished Senility designed to maintain the traditional corrupt mechanisms in power. Chinese families and Governments might change personnel, but not a practice developed through the Centuries to define the personal and familial power within Chinese society. Americans think in terms of Years and Decades, though you average Chinese thinks in terms of Centuries, the quest being the long-term survival of the family unit on which the Concept of Life revolves to the Chinese.
Greg Mankiw expresses a sentiment on which I must agree. The Obama administration shows a distressing tendency to refocus Public Sight from things which are difficult to accomplish, to things equally difficult to accomplish but where actual failure will not be observable for years. The federal government has pumped an estimated $4 trillion into the economy by one venue or another, all funds being in truth a reduction of the Profitability of the last eight years. Financial Stimulus to recover favorable production within a Bust should and must be considered a reduction from the previous production levels of the prior Boom. It is sad that such Stimulus has such a poor track record in returning production to Boom levels, and the real rationale for transferring Public Attention elsewhere.
The Obama administration are not the only Ones who try to confuse the issues. There is a huge segment of the economic profession which extols the value of Trade, while never coming up with hard numbers to back their claims. This article expounds such ideology. High levels of Trade have had many effects, a great many of which have been good, but there a an equal number of bad aspects to Trade. Trade has created Jobs, but also eliminated the viability of Millions of Jobs which could no longer finance a lifestyle of equality with their Peers in Society. Goods became cheaper, and cheaper to Produce, but often only at a Cost where a vast number of the Labor Force no longer had the Skills with which to support themselves. This establishes a base level of both Unemployment and Underemployment in Society, a great Danger when Bust conditions exist under the altered economy, because reduction of Consumption under this circumstance creates a vast pool of unfunded Population. It not only increases the necessity for Welfare payments, but multiplies the magnitude of such payments. Several alternate losses to social unity could be discussed, but the Road is long, and it is sufficient to state that Trade can be as Costly and Utility-Defeating as it is Beneficial; dedication to Trade could be as destructive as devotion to Tight Money, or ‘Back to Nature’ pursuits. lgl
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