The Chinese Problem

It was once said that Communism is Liberalism in a hurry.  Which is why China is now becoming an example (along with Europe) of what happens when Liberals get their hands on power. 

It cannot be denied that China has its admirers (hello Thomas Friedman).  What’s not to like?  High growth, high speed rail, a government that has absolute control of the economy. 

But China’s problem, or should I say the Communist Government’s problem is that in the process of economic development using a modified capitalist model it has created expectations that are impossible to meet.  It has also created corruption that is the byproduct of “crony capitalism” and command-and-control economies unshackled by the moral strictures that prevent political and commercial leaders from “cooking the books.”

Once you promise people pie in the sky you had better deliver or go back to proving that power grows out of the barrel of a gun (as Mao so famously said).  Instead of shooting people, the Chinese government has turned to bribery.  Forget for a moment about cities built with no one living in them.  Forget about using warehouse receipts for non-existent material as security for loans.  Forget about accounting that would make Bernie Madoff blush.  When you begin a Chinese version of America’s social security system combined with a one-child policy you are setting a financial time-bomb that is designed to explode.  But since the leaders of today’s China are mostly elderly – and Liberals in a hurry – I’m fairly confident that the bomb is set to detonate after they are safely dead.

H/T Glenn Reynolds