I know this is hard to imagine but what if the financial industry in a nation conspired to create a dishonest system that looked to everyone else to be a sound and thriving economy but wasn’t?

Now suspend your disbelief even further and imagine that out of greed, what such entities were doing were intentionally creating an economic bubble that brought them huge wealth while pulling out the cornerstones of the world’s economy.

Now imagine that I’m talking about China.

The New York Times ran this sobering article on Thursday

The New York Times
Daniel Acker/Bloomberg News

James Chanos made his hedge fund fortune predicting problems at companies and shorting their stock.

As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.

http://www.nytimes.com/2010/01/08/business/global/08chanos.html?scp=2&sq=china&st=cse

Now, this is one man’s view of China’s economy but what’s worrisome is that it has the “feel” of being very viable, especially in light of what we’ve learned about how corrupt and nihilist the so-called “sharpest” financial minds are in the Western world.

The prevailing short-sightedness, greed and immorality of the corporate mindset represents a far greater threat to the future of our civilization than terrorism.

There is every motivation for them to kill the golden goose, to squeeze every last drop of life out of it if it means more money for them today or this quarter.

The financial world is in fact sociopathic and self-destructive, recent history clearly confirmed this.

So what if this kind of thinking, practiced to one degree or another around the world, also resides in China? What then, if China’s economy collapses and there is no one to keep financing the U.S.’s deficit spending?

It is a frightening thought but not outside of the realm of possibility. That doesn’t mean that we should buy guns, gold and canned beans and cringe in our basements waiting for the Apocalypse. What it does mean is that the U.S. urgently needs to reform its corrupt financial industry and get on top of deficit spending ASAP to insure against being thrown overboard and plunging like an anchor to the bottom of the financial sea.

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Kalima
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My hubby goes to Shanghai at least twice a year, we take part in a school there. After his last visit last October, he said the rate of new buildings going up is phenomenal. So much for their decades of complaints about western capitalism. It makes me laugh.

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Khirad
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Oh my lord, the Shanghai skyline is amazing (especially the Financial Centre) and popping up like no one’s business. I’ve seen a couple programs on it.

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Pepe Lepew
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An interesting (and incredibly complex) science fiction book that takes place in Shanghai, “The Diamond Age or, A Young Lady’s Illustrated Primer,” by Neal Stephenson.

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bito
Member

James Fallows of “The Atlantic” has spent the last three years in China and has just returned. Here is a long piece he ha written on the US-China and some aspects of the financial relations. I have not read it but I heard a little on NPR this morning.

http://www.theatlantic.com/doc/201001/american-decline

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Khirad
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I haven’t read it either (yet), but I heard about this elsewhere.

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bito
Member

Khirad, He has written quite a lot on China it appears from that page. And photos

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choicelady
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I don’t precisely know which way to go with this. I used to teach a course on global capitalism to union people who knew the impact if not the reasons for America’s decline. It was easier then (15 years and more) before we had to account for China, but I do think certain things still apply.

Yes, the US needs to become stable, but that in itself runs counter to the need to spend to jump start our economy. But we won’t survive – no nation will survive – if we don’t take a hint from what has survived every economic downturn. The greater degree of relative autonomy a village, town, state, nation has from utter reliance on others, the better it weathers the storm. One has only to look at the middle of the nation – NE, OK, KS – to see that those who never boomed, also did not bust. In one of the wonderful ironies of history, people are leaving CA to head to OK. Stability counts.

We often lose sight of that, but that in fact is why those of us who’ve been in community banking and credit union advocacy saw participants survive when all about us were crashing and burning.

Now – do NOT get me started on Ms. H claiming she made this idea up over Christmas dinner! She just jumped on the bandwagon twenty-plus years too late. Glad if it motivates people, but in Sacramento the largest and most stable financial entity is a credit union because during late state budgets when salaries are frozen (and that means every year) said credit union provides NO INTEREST loans to its members who are mostly state employees. Who’d be fool to bank at B of A when you could be at Golden1 with the latter’s stability?

Ms. H. is right – pull money OUT of banks and back into community banks (NOT S&Ls – they are still not without problems) and credit unions, and suddenly these suckers are NOT “too big to fail”. They will shrink, and they should.

This ought to be an Obama talking point about trusting your local community bank AND credit union (be sure it’s insured) on the Main Street level. BTW – I believe you can refinance your home mortgage by transferring over to your credit union. If high interest ARMs got you, that’s the way to move.

Community banks are too few and certainly not present everywhere, but credit unions abound. If they are at some geographic remove, It’s still worth a few dollars of fees to extract your money from an ATM that’s not linked – the overall safety and responsiveness is worth it.

The US, China, and every other nation MUST go back to rebuilding a fairly independent economy. Even die-hard market lovers ought to remember that Adam Smith did not envison what we have today. “Free trade” was supposed to be about SURPLUS and trading that which you produce that is extraordinary, not giving up your basic production.

Obama needs to lean on a “renew the US economy” movement. The free traders can go jump – they’re not helping us at all. We should be happy that the cash for clunkers paid for Toyotas – they’re MADE here with US labor. We have to care less about ownership (though local control is a key issue) than about our neighbors who get jobs. I dislike absentee ownership, but the primacy needs to be on who WORKS and PRODUCES things here intially.

China must do the same. Their factory capacity needs to be directed now to their domestic needs or the inequalities they are breeding will bring them down. We can do all this. But it does take shedding Reaganomics, free market worship, and caring about the ordinary person and believing that stability is more important than riches. Wonder if we have the will?

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KQµårk 死神
Member

Very well said.

The thing I detest about Mr. H is how she demagogues an issue and acts like she was the first one with the idea. I tore up my credit cards over ten years ago and get all my loans through credit unions. Mortgages you have no control so they can sell them anyway. So again it’s all about her like it was when she discovered progresivism.

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Khirad
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I was watching John Oliver (English dude from The Daily Show) do his comedy routine last night. He had a line to America, that ‘all that matters is that you’re on top when the world ends! You win!’ I think China is playing this same game… Not to sound racist, it’s not about the people, but authoritarianism – I never have trusted them – and of course they’re cooking books. The Yuan itself is cooked to an extent, no? I know they’ve made corrections here, but still. It may not be an improvement in many respects such as notorious corruption and the like, but I really wish we’d start moving more and more to India for our trinkets, sprockets, doodads and tube socks economy. In the end we’d at least feel more comfortable supporting the largest democracy in the world, rather than perhaps the largest human rights abuser. Perhaps that’s just the Indophile in me speaking, admittedly, though.

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escribacat
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I’m not sure the average Indian citizen has it much better than the average Chinese citizen.

My niece just returned from a year in China and she actually didn’t have much good to say about it. They are still a third world country and the new wealth hasn’t trickled down much. But from what I’ve read and the programs I’ve seen, the standard of living has improved for many.

China has a long, long way to go but I find it heartening that they seem to be evolving without a violent revolution this time around. They’ve had a horrific history with much suffering. Yes, their leadership certainly leaves much to be desired and a few people are clearly raking in a lot of dough by paying slave wages. Their captains of industry don’t demonstrate any noticeable scruples. But compared with the economic stagnation of the last 50 or 100 years there, it’s pretty amazing what they’re doing now.

As for the single baby policy, I can understand why they had to take control of the population explosion there. It was a drastic problem and they took drastic measures. At the same time, I recognize that the policy is incredibly oppressive and led to some very disgusting acts by some would-be parents.

All in all, I am a bit disturbed by the anti-China stuff. I remember when I lived in LA years ago, people were wailing that downtown LA was “owned by the Japanese.” Some of this “blame the Chinese” stuff sounds a lot like that to me. As Americans, we are good at throwing our weight around overseas but when someone comes here and does it, we’re singing a different tune.

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Khirad
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Believe me, it’s not about “blaming the Chinese” – and yeah, I wish everyone in the world had a two child policy. If you got that impression from my posts, I can assure you they weren’t meant that way – I was even sensitive about coming across that way – I take pains not to caricature China too much. Merely that I’d take India over China – and Bollywood over Kung Fu (not to caricature or anything!). More of a personal preference. 😉

Speaking of racist caricatures, though.

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escribacat
Member

What happened to that vid you posted? I watched it. It was weird all right! But no weirder than the stereotypes in a lot of American films. Remember “Sixteen Candles?” The dopey Chinese exchange student in that? talk about a stereotype.

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Khirad
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I turned it into a link and thought about a warning for those easily offended. Aamir Khan is actually known for better quality movies (by admittedly low Bollywood standards), it’s disappointing. I know it is Japanese, but the stereotypes of Chinese can be even worse, given the two country’s animosity. Fun fact, movie China Gate, is based off of Kurosawa’s “Seven Samurai”. Go fig.

Long Duk Dong? Yeah, like that wasn’t meant to be offensive. This makes me laugh still though:

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KQµårk 死神
Member

Actually I forget what came first now. The “Magnificent Seven” or “Seven Samurai” but they’re based on the same story as well.

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KQµårk 死神
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Thanks I wasn’t sure.

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Tiger99
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The Magnificent Seven was released in 1960 and Seven Samurai was released in 1954…

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Khirad
Member

Seven Samurai was first. Although the Mag 7 itself directly influenced another Indian film of the ‘Masala Western’ subgenre, “Sholay”. Useless trivia…

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escribacat
Member

I have a homework assignment for you, Khirad. Rent a couple Zhang Yimou films — Raise the Red Lantern, Shanghai Triad, or Ju Dou. Then tell me if you still prefer Bollywood!

Having said that I have to admit one of my favorite filmmakers is Satyajit Ray. He is brilliant (but he can’t be considered Bollywood).

EDIT: I realize my post is probably kind of irritating, but hey, I do have a soft spot for the Chinese. I have listened to a particular lib acquaintance rant on and on about the “bad Chinese” and I got really sick of it. Sorry to bring that here!

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Pepe Lepew
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I love a Chinese movie called, “Hero.”

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KQµårk 死神
Member

I’ve worked with many great Chinese folks and am still friends with a few. It’s not he people I have a problem with it’s the government.

I have a soft spot as well based on the relatively recent history of China. Many people do not know how the Chinese were victimized during WWII. It really was a travesty how few Japanese war crimes were prosecuted as opposed to the West.

I should say I hate how oppressive the Chinese government is with their own people. They have far fewer freedoms than the West. The state decides where you will travel, what school you will go to, how many kids you can have, where you will work, they rip apart families and communities for the greater good etc… And that does not even include the hard core civil rights violations and Tibet.

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Khirad
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I recommend Nanking to anyone that hasn’t seen it. And yup, as always, I separate the people from the gov’t.

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KQµårk 死神
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Khirad
Member

I’ve had the Apu Trilogy in my netflix queue for over three years. Not available. Why stock foreign classics? I’m so thinking about nehaflix anyway for the guilty pleasure that is Bollywood – they’re always out of stock or perpetual waiting on the biggest ones regularly.

Actually, I will check those Zhang Yimou films out. I’m fascinated by all cultures, trust me, and have read a fair share of Chinese philosophy and religion. No need to explain. I’m the one that completely flipped out over Glenn Beck’s Ganges comments, after all. I understand. Especially about bringing recent baggage from elsewhere when you’ve had a nerve rubbed raw on a topic.

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whatsthatsound
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Say what you will about the Chinese, they didn’t inflict Gwen Stefani, Fergie and Nelly Furtado on the rest of the world!

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Khirad
Member

I blame Portugal and Canada for Nelly Furtado! Gwen was good with No Doubt, I give her absolution for her later sins.

Quite frankly, outside of Hong Kong, China doesn’t do much at all. Like other governments which are authoritarian, it isn’t exactly good for the blossoming of creativity. A few good movies, a few rock bands that are sometimes innovative, but when people go to China to study, it’s often to study Chinese, and little else. That’s where America still has much of the world beat.

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whatsthatsound
Member

I just assumed Nelly Furtado was American, my bad. But those three are, to me at least, Weapons of Mass (Drive me to) Distraction!

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Khirad
Member

Baywatch was number one in Iran even e’cat!

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escribacat
Member

Nothing is more embarrassing than certain US television programs that get exported. I think “BayWatch” is the number one show in the Israel area (or it was at one point).

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bito
Member

wts, or karaoke!

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whatsthatsound
Member

I resemble that remark!

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whatsthatsound
Member

I’m pretty much on board with you about this, escribacat.

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boomer1949
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Khirad,

Do you really, really in your wildest dreams think we, the United States trust them anymore than you or I?

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KQµårk 死神
Member

No but both Bushes and Clinton enabled China and we still do for the most part. In fact when Geithner properly called out China for manipulating their currency he had to go hat in hand and reassure China. You don’t have to trust someone to enable their bad behavior. Now because of so many years bad outsourcing policy the US and China have this sick symbiotic relationship. China knows it’s citizens are going to buy all the junk it creates so it leaves that to the US and the US uses them for a piggy bank to borrow back our own money.

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bito
Member

And they need the US to fuel their economy!

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Khirad
Member

No, but they’ve got us in a tight spot.

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bito
Member

And we have them in a tight spot. Neither country can afford to let the other fail.

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Khirad
Member

Indeed. I don’t like the relationship either way, though.

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javaz
Member

OT briefly, but human rights has always been an issue with me when it comes to our dealings with China.
I’ll never forgive them for Tienanmen Square or forcing women to have abortions after one child, unless they have money to pay for the right to have more than one child, and how the Chinese seem to get away with killing newborns because they were born female or having abortions when they discovered it was a girl.
And then there’s the abuse in Tibet, and the list goes on and on.
I’ve always thought it so hypocritical of the USA, especially under Bush Jr who was supposed to be ‘right-to-life’.
I really hate that we must kiss China’s ass, while preaching democracy and freedom for Iraq and other middle east countries.
No wonder so much of the world still hates us!

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Khirad
Member

And the fact that China deals with all the persona non gratas of the international community, all the rogue states and dictatorships. Oh, you mow people down and rape women in a stadium in Guinea? How about we be the first to bid on a contract? Sudan? No problem! Iran, puh-leaze. China just doesn’t care. I’d argue it props up and in turn supports more ill in the world than even the most reviled dictatorships themselves. Of course, the US is complicit in propping up plenty of these as well…

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choicelady
Member

And one of the grossest inequities is the support such disgusting behavior gets from the C Street crowd. As long as China is willing to defer to them and make them rich, then forced abortion, infanticide, corruption, poverty, and death matter not at all to The Family. Double standard does not even begin to cover it.

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javaz
Member

Or when they hosted the Olympics and all the rules and regulations they had in place for that!
It irks me that we deal with them.

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KQµårk 死神
Member

There is nothing racist about not trusting the Chinese government based on their history. It’s a very ends justify the means attitude and they will tell you what you want to hear and do what they want anyway.

The problem is the expectations nations set up for themselves. China cannot sustain the GDP growth it has and neither can the US. Europe has come to the realization that GDP growth is not everything and are much more focused on how their economies fit into making the lives of their citizens better, not just the rich richer.

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javaz
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javaz
Member

I’m not a financial or economic guru.
I leave all that to my husband, even though I handle balancing the checkbook!
But from my limited knowledge, I do not believe that the US will allow China’s economy to fail.
I know that sounds absurd under our current economic crisis, but we need them as much as they need us, and by us, I mean US consumers.
Plus, we have corporations going to China and building businesses over there that manufactures stuff cheaper to sell back to US consumers.
And, China, imho, will not call-in our loans, because it would bankrupt the USA and then where would China be without its largest importer?

I do agree with you in that we need to bring down our deficit, which will happen once the employment numbers rise.
We also need to reign in the greed and corruption of our financial system to prevent any outside influences.
With the world markets being so interlocked, we’re pretty much all screwed, unless stiff regulation is implemented.

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KQµårk 死神
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I always thought the whole idea that China had a booming economy was wrong. For who was the economy booming? A few at the top and even if they added millions to a sort of middle class we are talking about a population of a BILLION people. The vast majority of Chinese people are treated just above slaves. Now they are just slaves to greed instead of being slaves to Communism.

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