Is China’s economy more of a paper tiger than an Asian tiger?
Video on CNBC is embedded in there.
1. China’s economy is weak because of insufficient liberalization.
2. Trump’s unthinking protectionism hurts both sides, but China may be more vulnerable.
3. China’s cronyism presents a challenge for supporters of unilateral free trade.
4. Trump should have used the World Trade Organization to encourage Chinese liberalization.
5. The imperfect Trans-Pacific Partnership was an opportunity to pressure China to reduce cronyism.
6. Additional Chinese reform is the ideal outcome, both for China and the rest of the world.
“We have a crumbling subway system, record homelessness, public housing that is in crisis, overcrowded schools, sick people without health insurance and an escalating affordable crisis,” said City Council Speaker Corey Johnson, a Democrat.
All those local issues, in one of the highest taxing and spending states in the U.S. Why is that so? And a proud progressive city and state to boot:
State Assemblyman Ron Kim, a Queens Democrat, told protesters rallying on the steps of City Hall before the hearing, ” Any politician in our progressive city and our state who’s willing to had $3 billion to Amazon — that should be a career ender right there.”
It would be funny if it weren’t so sad.
Whole thing here.
The deal with Foxconn already looks bad for the state—the subsidies promised by Walker amount to $230,000 per job, and that’s if Foxconn follows through with its promise to create 13,000 jobs in the state. Already, Foxconn seems to be backing away from that pledge, saying last month that it may have to import Chinese workers to fill some roles at the yet-to-be-built facility.
The newly elected Governor-elect, Democrat Tony Evers promised to review the deal but Republicans in the legislature are trying to pass bills to protect the Foxconn deal, among other things.
This is the crony capitalist approach to state-level governance.
Figure Nick Gillespie skeptical:
Factor in the housing bust from a decade ago, the Great Recession, mall closings, the opioid epidemic, and whatever else you want to, and any semi-serious analysis is going to conclude that over the last few decades, “The living standards of Americans have vastly improved during the past 50 years, with the quality of available consumer products steadily rising even as their prices have steeply fallen.”
Me: there’ll be more corruption, greater market concentration, fewer choices, higher costs, lower living standards with more regulatory control. Check this:
When actually talking to Congress, Zuck (Facebook’s Mark Zuckerberg) even volunteered to help write the regulations, while noting that the more Facebook and social media are regulated, the less likely it is that a rival will emerge.
How altruistic, he’ll help write the regulations — for the benefit of Facebook and every other company whose representatives can influence him. That’s the way government regulation works. They’re not going to do it the way they say or what you think.
Veronique de Rugy:
Handouts like this to Amazon and other prominent companies are appalling in their cronyism, pure and simple. I agree that she doesn’t understand economics and that her socialist ideal is a recipe for fiscal and economic disaster. But her conservative critics reveal their own economic misunderstanding when they support targeted tax breaks as a means of creating jobs.
Agree with Veronique about all that. But, special tax breaks is how Democrats and other lefties like tax policy: they like high taxes then use special breaks to woo corporations, universities, etc to their political jurisdiction. Of course, Republicans and conservatives are not immune to this temptation but as a rule, they prefer low and simple taxes.
The Washington Examiner, a conservative newspaper, agrees with President Trump on China’s “. . . destructive practices of forcing businesses to surrender their technology to the state and forcing them into joint ventures in exchange for market access.” and “. . . massive subsidizing of industries through colossal state-owned enterprises that put private competitors out of business.”
Then the WE proceeds to NAFTA and “Canada’s dairy cartel, but they operate on a similar protectionist principle. . . . Canada’s quasi-Soviet dairy policy is just one of the many thorny issues making agreement more complicated.”
How about the U.S.’s distorting trade policies? Agriculture receives billions in subsidies and regulatory protection. The same arguments WE makes about China and Canada can be made about the U.S.
How do higher ethanol costs hit the middle class, the people President Trump supposedly seeks to protect from The Swamp?
The Trump administration acquiesced to the ethanol lobby in a recent decision on the costly Renewable Fuel Standard (RFS), says the Wall Street Journal. Under a Bush-era 2007 law, the mandated amount of biofuels in your gas tank is increasing, which puts upward pressure on gas and food prices and likely harms the environment.
Yes! Quadfecta! Higher prices for gasoline and food, likely harms the environment, and provides only two-thirds the energy content of regular gas.
Kicker! The hidden games of the bureaucracy: ‘The RFS [Renewable Fuel Standard] is also a bureaucratic nightmare, and has spawned a complex credit-trading system, which investor Carl Icahn said is a “$15 billion market full of manipulation, speculation and fraud.”’